Reputation is everything for a business, and although it can take some effort to build it, all your hard work is wasted if you fail to protect your customers’ data. In the digital era, safeguarding clients’ personal information has become paramount to ensure it doesn’t get into the wrong hands. If a data breach occurs, your business will suffer in the long run, and even if you may not need to shut down your operations, the consequences will likely be dire.
How common are data breaches in the UK?
Businesses have a legal duty to protect customers’ personal information. However, with cyberattacks becoming increasingly sophisticated, companies often fail to do so. In fact, the UK has some staggering statistics regarding data breaches:
- Between 2021-2022, over 80% of businesses in the country experienced a cyberattack;
- On average, the cost of ransomware attacks was $1.08 million in 2021;
- 400,000 cases of cybercrime and fraud were reported in 2021 alone;
- Every 10 seconds, there is one SMB that gets hacked.
The costs of a data breach for businesses go beyond money
The most evident impact of a data breach for companies is financial loss, but the implications are different depending on the type of breach. According to https://www.databreachclaims.org.uk/ , customers can make a data breach claim if their personal information gets compromised, which means you will have to compensate them for the damage they’ve suffered. But you will also have to contain the breach, realise a decreased share value, and strengthen cybersecurity – and all of these things involve significant costs.
From 2018-2022, many famous companies, including Uber, Google, Meta, and Amazon Europe, dealt with a data breach that led to considerable financial losses. These companies received significant fines for not dealing properly with customers’ data, showing that no business is immune to cyber threats, no matter how big or small.
It may seem like nothing can be worse than the financial implications, but that’s not right. Nowadays, the world is hyper-connected, so news can spread really fast. Even those who don’t know your business will likely hear that you’ve been breached. In the aftermath of such an incident, you’ll have to deal with bad press, lost confidence, and negative customer opinion of your business. In fact, research suggests that 2/3 of customers turn to competitors if they have a poor customer experience with a business. When privacy issues are made public, customers lose trust in the venture, reducing customer spending. Salvaging your reputation after a data breach can be extremely difficult because nothing ever disappears from the Internet, which is why prevention is always a better idea. However, after the data breach, it can be helpful to be transparent and honest about the incident, as some customers may be forgiving.
Operational disruptions are another consequence of data breaches, but this is probably unsurprising. After such an incident, important data can be entirely lost, requiring businesses to spend a lot of time recovering normal day-to-day operations. In such a scenario, the most common response is to shut down operations until you can find a solution, as this gives you enough time to identify the source of the breach. But if your operations are shut down for a long time, customers will likely leave, ultimately leading to lost revenue. Unfortunately, for small businesses, this often means complete cessation of operations.
How can your business prevent a data breach?
Security breaches are becoming increasingly common, and any business can be vulnerable to them, regardless of their size. This is why it is imperative to take preventive measures and avoid the long-lasting impact of a data breach.
Provide employee training
Employee training is essential in preventing a data breach, especially if you are a small business that can’t afford to hire cybersecurity specialists. Educating your employees on cybersecurity helps ensure they know how to protect themselves from possible digital threats, thus keeping your business safe.
Keep your software updated
Software updates are essential in mitigating cybersecurity risks because they include security patches for common vulnerabilities that bad actors could exploit. Outdated software is often the reason why so many cyberattacks happen, whether ransomware, phishing scams, or data breaches. Hence, you should set automatic updates for your software or designate an IT member to ensure the system is updated on time.
Use access controls
Access controls are another effective way of preventing data breaches. Simply put, they enable you to limit access to the data within your company, which can be achieved through passwords, 2FA or other cybersecurity measures.
Encrypt your data
Data encryption is a vital security measure you should take to safeguard your network from bad actors. This helps ensure you won’t lose crucial information due to unauthorised access. Encryption is a cost-effective way of protecting your business data, and it can protect you against regulatory fines, increasing customer trust and enabling you to maintain the integrity of your data.
Conduct frequent security audits
Security audits can go a long way in ensuring your business data doesn’t get compromised. It allows you to review the systems within your company to identify possible risks and vulnerabilities. Once you do so, you can take action to address these issues before cybercriminals get to exploit them. Keep in mind that security audits shouldn’t be conducted by just anyone – only qualified professionals who have a set of knowledge on cybersecurity can do so.
Have an incident response plan in place
Every business should implement an incident response plan as part of its cybersecurity strategy. This plan should describe the steps that a company should take in case a cyber incident occurs. If you don’t take the time to develop such a plan, you’ll struggle to deal effectively with a cyberattack, leading to many consequences. On the other hand, an incident response plan allows you to respond quickly, thus minimising the impact of the incident.
Cyber threats have become rampant nowadays, putting all businesses at risk. You may believe you can’t become a target, but the truth is that a data breach can happen to any company, wreaking havoc on the operations and leading to significant costs and reputational damage, among other things. It takes only one mistake or outdated software to ruin your business, so it’s critical to make proactive efforts to keep your venture safe.
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