The potential risk in brand value of a data breach to the world’s 100 most valuable brands could amount to as much as $223 billion, according to a joint cybersecurity and brand value impact report by digital services company Infosys, and Interbrand, a brand consultancy. The report, ‘Invisible Tech. Real Impact,’ examines the long-term impact of data breaches on value of the world’s top brands.
To quantify this risk, the firms identified the brand factors most impacted when a company suffers a data breach – presence, affinity, and trust – and simulated the resulting brand value at risk in the event of a breach, using Interbrand’s proprietary brand valuation methodology. They found that industries such as technology, financial services and automotive might suffer a higher overall brand value at risk from data breaches, whereas luxury brands and consumer goods face greater value at risk as a percentage of their net income. Specifically, the report quantified the brand value risk different industries face because of a data breach, including:
Technology – Up to $29b brand value risk (up to 53 percent of 2020 net income);
Financial Services – Up to $2.6b brand value risk (up to 52 percent of 2020 net income);
Automotive – Up to $4.2b brand value risk (up to 77 percent of 2020 net income);
Consumer Goods – Up to $5b brand value risk (up to 114 percent of 2020 net income); and
Luxury – Up to $2.4b brand value risk (up to 115 percent of 2020 net income).
Vishal Salvi, Chief Information Security Officer & Head Cyber Security Practice, Infosys said: “Cybersecurity for long was seen as a cost of doing business. However, in this digital age, where a company’s reputation is based on its ability to protect customer data and establish digital trust, cybersecurity is becoming a business differentiator. Through this report, we bring a novel approach to quantifying the impact of a data breach to the brand value to help businesses understand and evaluate if the cybersecurity investments they are making are proportionate to the risk they face. It also reinforces the need for CISOs to engage with the board and build a robust governance ecosystem while employing a ‘secure by design’ approach to safeguard their brand value and reputation “
And Ameya Kapnadak, Chief Growth Officer (India), Interbrand, said: “There’s a fundamental shift in how brands engage with their customers. As the lines between the physical and virtual worlds increasingly blur, and brands rely more and more on the digital world to create unique experiences for their customers, data breaches have the potential to dent the very core of the brand’s relationship with its customers. These shifts underscore the need to re-evaluate ‘hygiene’ aspects of customer experience, like cybersecurity.”
Interbrand valuers estimated the impact of a breach on a brand strength with scores from Best Global Brand (BGB) 2020 as a benchmark. The simulation used these ‘post breach’ brand strength scores to estimate the “Value at Risk” due to a breach, on the Best Global Brands.
