Understanding the Impact of Data Breach Management on Business Continuity
The reality is that cyberattacks are inevitable, but a well-crafted business continuity plan will make all the difference when it comes to managing these incidents and their impact. A data breach is costly. From reimbursing customers for credit monitoring to complying with global regulations, the costs can add up.
Loss of Revenue
A data breach is expensive and can cause companies to lose revenue. When public companies are hit with a data breach, their stocks usually dip, and the cost can snowball. This is why cybersecurity should be an ongoing rather than a one-time project. Keeping current on the latest security updates, testing, and monitoring can help mitigate cyberattacks and strengthen business continuity. This way, the organization can avoid costly data breaches and remain resilient in crises. If you find out you have been hacked, communicate clearly with consumers to reassure them and inform them about your steps to protect their privacy. It would help if you also published clear, straightforward answers to commonly asked questions on your website so that consumers can access them anytime. Businesses that weave incident response planning into their business continuity plans save an average of $1.49 million. That’s why it is so essential for organizations to understand the impact of data breach management on their business continuity and to incorporate a robust plan into their overall strategy.
Loss of Customer Trust
When a company experiences a data breach, it affects everyone within the organization. It also impacts customers, who increasingly know the need to trust their businesses with their data. A robust business continuity plan helps companies re-establish customer relationships and rebuild trust after a breach. Data breaches can be caused by various issues, including malware, phishing, and misplaced devices, such as smartphones or tablets that contain sensitive information. Many are the result of outdated systems that leave vulnerabilities open for attack. Companies should consider implementing a policy to review and update their systems regularly to help protect against these threats. A well-defined and repeatable process empowers the organization to meet the specific pressures and timelines of a breach response. It also allows them to accurately demonstrate that they were prepared and that their response was proportionate and adequate by the relevant legislation.
Loss of Productivity
In addition to being costly, data breaches disrupt daily operations. The time spent recovering from a breach impacts productivity and can lead to lost revenue. The good news is that the more an organization practices its business continuity plan, the easier it will be to recover from a data breach. Cyberattacks and data breaches are becoming more sophisticated, many driven by ransomware. Attackers may steal an employee’s device to access their work files, break into company offices to physically remove hard drives or paper documents, or use skimming devices on point-of-sale systems to collect payment card information. Depending on the nature of a breach, the company must contact customers, regulators, and staff to notify them that their privacy was compromised and report on the incident within specific timeframes. They also need to perform a risk assessment of the situation and determine the extent of the damage and ensuing costs. This step often includes forensics tools and a thorough data breach analysis. It can also include implementing new security protocols or patches for vulnerabilities identified during the risk assessment.
Loss of Customer Loyalty
Many companies that have suffered data breaches find it challenging to keep loyal customers. One study found that about 1 in 3 customers discontinue their relationship with the company after a breach. Fortunately, it’s possible to mitigate these losses with the proper preparation and planning. For example, creating a clear plan that includes steps for communicating with staff, clients, and regulators at each process stage is essential. It’s also crucial to be transparent throughout the response process and show that you care more about helping those affected than you do about stock prices. It’s worth mentioning that the more personal and sensitive the data, the more damage can be done. For example, consumers tend to respond more harshly to a data breach when their credit card information or medical records are accessed. But it’s not only the type of data that makes a difference; it’s how it’s handled afterward.
Loss of Intellectual Property
Regardless of whether the attack was accidental or malicious, a data breach can leave behind significant intellectual property damage. These damages can impact the company’s ability to sell itself or its products in the future and may even result in lawsuits. Moreover, hackers often take a destructive approach to breaching systems. These attacks, which account for 17 percent of breaches in the Cost of a Data Breach 2022 report, are typically the work of hacktivists or nation-state actors seeking to damage a company or its customers. Developing and practicing a relevant business continuity plan addressing cyberattacks is complex. It requires the participation of all stakeholders, including employees, customers, and investors. It also involves defining the scope of the incident, identifying risks, and developing remediation steps. In addition, it is crucial to ensure that business continuity and cybersecurity teams are aligned and communicate with each other. This can be done by establishing a formal relationship between the two groups, with regular status updates and a clear definition of responsibilities. Regulators expect companies to document their IR processes, so it’s essential to have a robust process in place.
