It takes years to build trust and reputation and mere seconds to destroy them. The fear of a data breach always lures on businesses that are progressing toward becoming digitally advanced. According to Gartner, around 85% of businesses will adopt a cloud-first approach, and the remaining businesses will have to make this decision sooner or later.
A business has access to different types of software to simplify data management, and with third-party integrations, all of the systems are becoming connected and integrated. This centralized management provides a 360-degree view of business processes. However, one flaw in this integration might give hackers the path to access the entire organization’s data.
This might happen if appropriate data security protocols aren’t implemented. A data breach can have disastrous consequences. Hence, if you are investing in improving the IT infrastructure as a business, it is critically important to pay attention to the security aspect. Let’s understand
Real-Life Consequences of Data Breach
This incident is related to a DNA testing company, 23andMe, which was subjected to a large-scale breach in the previous year, in December 2023.
In a report by The Verge, the company confirmed that around 6.9 million users’ data was leaked. Out of the affected users, around 5.5 million had DNA Relatives mode on, which matches users with the same genetic makeup. This feature gives users insights into various data points, including relatives’ names, their predicted relationships, the percentage of DNA shared with the matches, individual ancestry reports, matching DNA segments, and uploaded photos.
The attackers used a credential-stuffing attack. This attack uses bots and tries to log into accounts with account information accessed from previous breaches. The assumption behind this attack is that many users reuse the same credentials and passwords for multiple services.
The thieves gained access to 0.1% of user accounts (14,000 users) over the course of five months last year. The entire data breach negatively affected the company’s reputation because when the company went public in 2021, its value was $3.1 billion, and now it is valued at $300 million, marking a depreciation of 91%. 23andMe has never turned a profit in its 18-year history, and according to a Guardian article, it might run out of cash by 2025. The users have sued the company, and each of the lawsuits mentions one thing: the company failed to implement and maintain adequate security measures.
What are the Possible Consequences of a Data Breach for Corporate Entities?
After reading about the 23andMe data breach incident, the consequences of a data breach are never good. While the company has asked its users to update their passwords and is currently implementing multi-factor authorization, it might take years to recover from the damages.
According to IBM and Ponemon Institute Research, the average financial loss a company incurs is around $4.24 million, which is more than a third of the average costs that come from lost businesses. Let’s understand the possible consequences of a data breach:
Reputational Damage
A data breach can raise questions about a company’s security practices, negatively impacting its reputation. The news of a data breach will remain on the Internet forever, and the affected entity will have to invest significantly in marketing and public relations to repair the damage.
Legal Penalties
Reputation damage is one thing, and legal consequences are another. First, companies might have to face heavy penalties because they failed to protect consumer data. For instance, Equifax paid between $575 million and $700 million because it failed to take strategic steps to secure the network.
GDPR compliance has different laws and regulations which apply to all organizations within the EU and to all companies selling services/goods to EU citizens. Fines for non-compliance can be as high as 4% of the company’s global revenue for each occurrence or 20 million euros.
Except from non-compliance fines, the affected company can face lawsuits, which can bring additional expenses as litigation requires lawyers to review the documents, and settlements are costly as well. For instance, US customers filed a lawsuit against Capital One over a 2019 data breach that affected over 100 million people. While Capital One paid a fine of $80 million imposed by the US Office of the Comptroller of the Currency in 2019, it also agreed to pay over $190 million to settle a class-action lawsuit.
Legal Penalties
According to Security Magazine, 66% of customers would not trust a company with their data that has recently become a victim of a data breach. Hence, a cyber attack will force existing customers to cut ties with the company, and new ones might be skeptical about working with the company.
Loss of Employees
Some tech employees will lose their jobs due to the data breach, and some might leave because of the stress of mitigating the incident.
How to Improve Corporate Security?
Security Magazine reports that 55% of respondents use their corporate devices for online shopping, which indirectly increases the risks to corporate IT infrastructure. Hence, here are the steps that a corporate entity should take to fortify its IT infrastructure and data:
Switch to encrypted communication platforms.
Attackers often access the system through emails because of cyber attacks like hacking, phishing, and data theft. It is best to implement end-to-end encryption, which helps protect and secure the data in transit or at rest. It converts the data into a coded format, making it difficult for authorized users to read.
Hence, the business communication platform you are using should support S/MIME encryption and other security protocols, like DMARC, DKIM, and SPF. These protocols ensure that data remains safe even if it is intercepted.
Introduce access controls and authentication.
Implement 2-factor Authentication or Multi-Factor Authentication to level up the security fences. With this, only authenticated users can access the data or platform. Also, introduce access controls to limit the number of people or employees who can access a document or file. For instance, depending on the information sensitivity, employees should be given viewing, editing, and signing roles and no access at all.
Store important information till whenever required.
Ensure that personally identifiable information (PII) is stored only until necessary. Also, choose a communication solution that requires minimal information from employees to work seamlessly.
Implement a “No Personal Email for Workplace-related Activities” Policy
Most employees use their email addresses for work-related purposes or use the company email address for personal use. Introduce a policy that abolishes all such activities, as the company email address should only be used for work-related requirements.
Secure your IT network.
Your network also matters when it comes to preventing data breaches. An unreliable network makes it easy for attackers to gain access. So, conduct an audit and take the right steps to improve the network.
The Bottom Line,
In this digitally advanced world, the best way to avoid becoming a victim of a data breach is to prepare for it. Hence, it is best to learn from previous incidents and prepare your infrastructure to identify and mitigate any such attempts as soon as possible.
When it comes to improving the network uptime and security, you should choose an enterprise network connectivity solution that guarantees near zero downtime and robust security protocols. For instance, CelerityX’s OneX solution provides bandwidth reliability and offers built-in security UTM (unified threat management).
As a rising corporate entity, if you are struggling with high uptime and security, connect with CelerityX experts to find an optimal and affordable solution to boost your IT infrastructure.
