What Is Data Breach and How Does It Affect Your Business?
Data Breach occurs when unauthorized individuals access sensitive information inside an organization. It can be the result of social engineering, malware, weak authentication controls, and internal threats. The average breach costs an organization USD 1.38 million in detection, remediation and post-breach expenses such as credit monitoring.
Typically, breaches expose personal details such as bank account numbers, email addresses, credit card numbers and login credentials for online accounts and social media. Criminals use this information to commit fraud, steal identities, and gain unauthorized access to financial services, healthcare, utilities and other networks.
In addition to financial loss, a breach can damage an organization’s reputation. Consumers lose trust in an organization when a breach occurs, even when there are strong preventive measures. This may lead to a decline in business with existing customers, and new business opportunities with potential customers.
Breaches involving intellectual property can also wreak havoc on an organization’s competitive position. For example, stealing proprietary technology, research findings or trade secrets can dismantle a business’s technological advantage and deter future investment. Breaches involving health data can trigger regulatory penalties, especially when HIPAA or PCI DSS compliance is violated. The law varies by state but typically requires notifications to affected individuals, the Department of Health and Human Services, and in some cases the media within 60 days of the breach. Some states have additional requirements based on whether the data is encrypted or in electronic form.