Data Breaches – Consequences & Repurcussions

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Luxembourg Government Systems Hit By Cyber Security Attack

 

Data Breaches Can Lead To Customer Loss

Data breaches do more than just cost money to remediate corrupted systems, they have a real effect on reputation as an Inc. analysis of a Cisco survey shows:

  • More than 50 percent of organisations were subject to some kind of public scrutiny after a security breach. Operations and finance systems were the most affected, followed by brand reputation and customer retention.
  • For organizations that suffered a breach,  22%  lost customers  (40% of them lost more than a fifth of their customer base). 29% lost revenue – with 38% of that group losing more than a fifth of their revenue. 23% of breached organizations lost business opportunities, with 42% of them losing more than a fifth of such opportunities.
  • CSO’s cite budget constraints, poor compatibility of systems, and a lack of trained talent as the biggest barriers to advancing their security capabilities. They also reveal that their security departments are increasingly complex environments with nearly two-thirds of organizations using six or more security products – some with even more than 50! – increasing the potential for security effectiveness gaps and mistakes. (Complexity and a lack of skilled professionals are putting businesses at risk.)

A  Large Percentage Of Data Breaches Are Traced Back To Third Parties

By one estimate, as many as 63% of data breaches are traced back to a third party vendor. Many of the major data breaches that have made the news in recent years – Target, CiCi’s Pizza, Wendy’s, DoTERRA – have been traced back to third party vendors.

The reason is easy to understand: if a vendor has been breached and customer contact information has been obtained, phishing attacks can be launched that specifically target the vendor’s customer base.  As these attacks come from “familiar” email addresses, they are very difficult to spot.