How to make sure your business data is secure

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Several years have passed since Capital One and Equifax publicly disclosed their respective data breaches. The furor has faded. But both organizations continue to grapple with the financial and reputational consequences – and probably will for years to come.

Your company may not be as big or well-known as these, but that doesn’t make it any less vulnerable to a crippling breach. His cyber defenses you only have to fail once for the worst case to come home. And this worst case scenario could be worse than you might expect.

Related: Cybersecurity Practices That Protect Your Small Business

In addition to obvious direct costsCyberattacks have a number of lesser-known indirect costs, including long-term lost revenue due to reputational damage, disruptions to daily operationsand stress for employees, customers, and stakeholders. Here are some financial risks of bad data security practices, as well as helpful strategies to help you improve your data security practices.

7 risks of bad data security practices

Let’s review seven common and costly financial risks of bad data security practices.

1. Theft of financial accounts

Direct financial theft can occur when hackers gain access to bank or securities accounts with liquid assets in them. Once they’re in, it only takes a few minutes to empty the accounts via outgoing bank transfer. This would seem like a sure way to get caught, since there’s another account involved, but it’s not too hard to hide the ultimate destination of the money.

Related: How social networks jeopardize data security

The potential for direct theft of compromised financial accounts is serious. Victims have no immediate recourse because share insurance only protects balances in the event of a bank failure. If victims can prove in court that their bank’s lax security practices contributed to the breach, they may be able to recover damages, but this can take years and success is not guaranteed.

2. Data lost or damaged

Digital piracy is not as complicated as a home robbery. Hackers don’t need to throw clothes on the floor or empty the pantry while searching for valuables. Experts can classify files and folders without even alerting the victim to its presence.

However, hackers leave fingerprints behind, and depending on their goals, their work can lead to data loss or corruption. This is much more likely following ransomware attacks, which are disruptive by design. As a result, many companies spend thousands of dollars hiring a digital forensics team to find out what happened and restore their data.

3. Ransom threats

If you are the victim of a data hijacking attack, you may not be able to access at least some of your organization’s data. It could possibly get completely blocked.

If you want to get back in, you will need to pay a ransom, usually in Bitcoin, which usually cost thousands or tens of thousands of dollars. If your organization is larger or is known to have a lot of money, the ransom could be higher.

4. Regulatory fines for non-compliance

Government and regulatory fines related to poor data compliance are on the rise. Let this serve as a warning to reinforce your security practices or pay the price.

These serious fines are reserved for organizations in highly regulated industries, such as healthcare and finance, that fail to follow best practices laid out in law and regulation (such as HIPAA or PCI). In addition to incurring these regulatory penalties, you must notify all affected customers individually, which is a cumbersome process.

5. Legal expenses related to lawsuits

If your organization experiences a major data breach that affects your customers, suppliers, or any other third party who can demonstrate that they have been harmed by the breach, you may need a lawyer.

Even if you are ultimately not found liable for the violation, you will incur significant out-of-pocket legal expenses in the meantime. You will also want to retain attorneys to help you understand your exposure to future breaches and make operational changes to reduce them.

6. Lost revenue during downtime

Loss of revenue is difficult to predict in advance because every data breach is different. A “clean” information theft, while potentially costly in other ways, could have little direct operational effect. Conversely, a large-scale ransomware attack could shut down your entire organization for days or weeks, like JBS and Colonial pipeline discovered in 2021.

7. Customers lost due to reputational damage

Perhaps the biggest financial risk of all is the risk of long-term damage to your organization’s reputation. Since revenue is lost due to downtime, this is hard to predict. But a serious breach that drives away existing customers and poisons the well for new ones has the potential to be catastrophic.

5 Strategies to Improve Your Data Security Practices

You have a lot of power to reduce your company’s exposure to data security threats, but it takes some effort. Start with these five strategies to improve poor data security:

1. Use encrypted messaging solutions for all sensitive communications

Encrypting sensitive communications prevents unauthorized actors from accessing them or using them to threaten your organization. This reduces the operational risk of data security threats and could reduce your organization’s legal liability should they occur.

Related: Elon Musk is adding encrypted calls and messages to Twitter: ‘This will grow in sophistication quickly’

Consumer-grade instant messaging applications are not secure enough for confidential communications, certainly not for organizations in heavily regulated industries where compliant communication practices are mandatory. It is best to use a solution that offers end-to-end encryption and full ownership of user communications.

2. Use multi-factor authentication (MFA) whenever possible

MFA requires users to verify their identity before signing in. You probably already use MFA to protect your personal financial information, if only because your bank requires it. Turn it on for as many business accounts as you can, as soon as you can, and look for alternatives to services that don’t offer it.

3. Follow the “least permit principle”

This simple and scalable precept is basically the digital equivalent of “need to know.” The idea is that every employee, contractor, and stakeholder with access to your systems should have only those permissions that are 100% essential to their job.

They should not be able to access accounts or databases that they do not use regularly. They can get what they need from an authorized user if an exception arises. This practice reduces the risk of insider threats and removes a potential point of external compromise from the equation. It takes some work to implement, but your business will be much more secure.

4. Secure employee and contractor devices

This is especially important if you are a bring your own device organization. Always use an OS-based device policy to monitor employee devices used for work and remotely wipe them if they are lost or the employee leaves the service. Do the same for contractor devices, which are even more vulnerable as a class.

5. Educate stakeholders on common threats

Finally, educate your employees and other stakeholders about digital threats. Update this educational program as the threat landscape evolves. For example, phishing may be common knowledge to compromised employees, but the more sinister risk of Social engineering it might not be

Managing future data security risks

If implemented effectively and throughout your organization, these threat mitigation strategies will reduce your exposure to known cybersecurity risks. Unfortunately, they may not protect you from future threats.

It is often said that cybersecurity is an “arms race” between the good guys and the bad guys. While there’s a lot of gray in between, it’s true that the threat landscape is always changing. Yesterday’s risks are not today’s and certainly not tomorrow’s either.