Data security is critical for most businesses. Data can be any type of information from personal files, such as client information and bank account details, to intellectual property like market analytics and other data that must be kept top secret. These are information that are hard to replace and can be dangerous to the business if they are lost or if they fall into the wrong hands.
Unfortunately, over the years, many businesses have fallen prey to data loss, whether they were caused by disasters, security breaches, accidents or system failures. A lot of them were due to cyberattacks. In fact, according to the 2015 Cyberthreat Defense Report, 70% of organizations surveyed report having been compromised by successful cyberattacks in 2014.
Despite many organizations’ efforts to prevent data loss and data breach, doing so still presents many challenges as attackers get better and faster at what they are doing. This makes essential for businesses to learn more about what makes data security important.
Here are five reasons why.
Around the world, governments have started to impose regulations for electronic communications and data storage. These regulations, which aim to ensure the privacy and security of information contained in databases and other files, define the types of information that can be kept and under what conditions. Businesses are then expected to comply with these regulations or else face dire consequences for noncompliance, some even to the point of holding company executives criminally liable for failure to comply.
Financial Loss Prevention
Data is considered a very important asset for businesses, which is exactly why it must be safeguarded. Loss of information can cause both financial losses, such as loss of sales and payment of fines, as well as indirect losses, such as loss of customers.
The same cyberthreat report stated above also reveals that the average cost of a corporate data breach increased 15 percent in the last year to $3.5 million. The fact that losses are increasing is also alarming as the report likewise state that financial services organizations saw financial losses from incidents jump 24%.9 while the cost of a security breach leapt 282% in healthcare. Such losses affect businesses significantly and may be hard to get back from for some.
Keeping valuable data always comes with a variety of risks. However, the company can assess and survive these risks through the use of a risk management framework. Implementing such framework within the organization helps them protect information across the enterprise, including physical, virtual and cloud infrastructures.
The methods and processes within the framework will enable businesses to identify risks, their likelihood of occurrence, the magnitude of their impact to the company and how they can be addressed. This will enable businesses to ensure sustainability and create more value for their customers, employees, owners and other stakeholders.
Overall productivity is also affected when data losses occur. Often times, security incidents cause technical and operational failures in applications, which makes it difficult for employees to accomplish their tasks efficiently and quickly. Instead, they will have to deal with customer issues manually and have to wait for long periods of time for the systems to be restored.
The above research reveals that, among those surveyed, security incidents caused downtime of more than 8 hours for 31% of impacted organizations. Downtime causes some employees to become idle or to work at minimum capacity, which further diminishes productivity and causes the company to sustain financial losses as well.
The effects of downtime due to security incidents are not limited to the company employees alone. They affect the customers as well. Customers these days expect businesses to operate at all times and its inability to do so will drive sales away. Downtime is no longer tolerated by a lot of customers and they can easily and quickly purchase somewhere else.
Data security breaches also leave customers feeling uneasy about doing business with the company because of the fear that their personal information will be compromised. Not only will this result to loss of sales but also puts the company at risk for legal action in the event that the customers sue them for damages from the use of their confidential information.
These important reasons make data security a critical component for business continuity. Businesses cannot afford to not have data security policies and processes in place. Implementing new data protection technologies will enable organizations to keep operating even in the event of a disaster or a data breach.