Can Lack Of IT Security Cost You Money?

Lacking IT Security Cost You Money

Businesses in Central Illinois understand the risks when it comes to cybercrime. Data breaches have grown and evolved and are now a major global problem. You’ve probably heard about the frequency of attacks, phishing, malware and viruses. These have caused problems for companies of all types and sizes.

Lack Of IT Security Can Result In Costly Data Breaches

Numerous lawsuits have been filed against organizations like Equifax and healthcare providers in Illinois. In general, the public believes that their data will be protected and when it’s not, they’re taking these businesses to court.

The Cost of Data Breach Is Probably Higher Than You Think

If you think that an IT security breach won’t cost that much, you’re mistaken. The cost to recover from a data breach is staggering and in most cases. For some, it leads to the closure of their business.

According to the 2018 Cost of a Data Breach Study by Ponemon, the average cost for each lost or stolen record containing sensitive and confidential information increased by 4.8 percent year over year to $148.

And the study reports the global average cost of a data breach was up 6.4 percent over the previous year to $3.86 million.

The report goes on to state:

  • The average cost of a breach involving 1 million records was nearly $40 million.
  • The cost of a breach totaling 50 million records was estimated to be $350 million.
  • The average time to detect and contain a mega-breach was 365 days; 99 days longer than a smaller breach (266 days).
  • Nearly all of these breaches (10 out of 11) resulted from malicious or criminal attacks, not system glitches or human error.

U.S. companies experienced the highest average cost ($7.9 million) followed by Middle Eastern firms ($5.3 million).

Your Customers’ Lack Of Trust Can Cost You

Serious data breaches at financial service organizations like Experian and JP Morgan Chase have rattled the public’s trust. And legal practices, healthcare organizations and other businesses in Central Illinois haven’t been exempted from these attacks.

According to the Ponemon study, in 2018, more organizations worldwide lost customers as a result of their data breaches. This is because their customers lost trust in the company’s ability to protect their confidential data. The study goes on to say:

“The loss of customer trust has serious financial consequences. Organizations that lost less than one percent of their customers due to a data breach resulted in an average total cost of $2.8 million. If four percent or more was lost, the average total cost was $6 million, a difference of $3.2 million.”

There Are High Costs For Businesses When Breaches Occur

In the last few years, data breaches have become so prevalent that it’s almost commonplace to hear that a business has been breached.

In the healthcare industry, it’s estimated that a data breach in America costs more than 2 1/2 times the global average. At $380 per record, healthcare data breaches threaten us all in more ways than we know. The same is true in the legal industry.

In America, whatever you say to your doctor, lawyer or financial advisor is still protected under the law. But what if those confidential documents end up being placed online by cyber thieves?

Information like this can ruin someone’s life; and it can be painfully embarrassing and costly to the business that allowed the breach to occur.

People need to trust you. If you hear that a law firm, healthcare provider or financial services company has recently experienced a cyber breach, how likely are you to continue doing business with them?

Consumers Stop Purchasing From Businesses That Experience Data Breaches

American consumers often “vote with their feet” and often stop doing business with a company that’s suffered a breach, Ponemon told NBC News.

“A lot of people do care about the privacy of their information, and they want organizations to be more proactive in managing that information, so this loss of trust does translate into a much higher cost.”

Learning that all of your personal information is in the hands of thieves causes a significant change in the behavior of consumers. A study by General Global Assistance found that consumers who learned of a data breach at their favorite retail store cut back on purchases from that retailer. With over 1,500 data breaches taking place in 2017, consumers responded in this way:

  • 84 percent said they might not consider doing business with a retailer who had experienced a data breach.
  • 57 percent of shoppers believed that identity theft and data breaches would be a significant threat during the holiday season.
  • Four in 10 consumers said they believe businesses aren’t doing the best they can to protect us.
  • 38 percent said they weren’t sure all companies were doing everything possible to stop data breaches.

Law Suits Are Being Filed Against Businesses That Lack IT Security

Due to the growing number of cyber thefts, consumers are taking their favorite stores, law firms, hospitals, banks and others to court. They believe these entities were negligent and didn’t provide strong enough security measures to prevent the breach.

In some cases, they are right. These lawsuits prove that Americans are tired of waking up and finding that their personal information was stolen again by cyber thieves. They’re ready to take action and sue.

New Regulations Are Being Put In Place That You Must Follow

Cybercriminals are always searching for any vulnerability they can take advantage of. New types of malware, worms, viruses, and ransomware are developed each year. This has caused regulatory and compliance requirements to be changed and upgraded to meet these threats.

The requirement to maintain and secure your network and client information in your databases will include large financial penalties for those who don’t follow these guidelines. For organizations like law firms, financial institutions, and healthcare providers, the government, regulations will be even tougher.

You Can’t Afford To Just Wait And See If A Data Breach Will Occur

Cyber breaches are successful because hackers prey on human weaknesses. Most commonly, hackers lure an unsuspecting victim into giving access over to the cyber thief believing him to be a legitimate person or company. Hackers then sell the information they obtain on the Dark Web.

Moving into the future, most experts believe the financial impact of data breaches across the corporate world will increase significantly. It’s not a matter of whether your business will be a victim of cybercrime; it’s a matter of when this will happen.

What Should You Do?

When it comes to cyber security, you must stay one step ahead of the criminals. You must understand the importance of protecting your clients and data from hackers. And, you should always be vigilant.

Putting A Cyber Security Plan In Place Will Prevent Breaches

You need an IT service company in Central Illinois that will conduct a full IT security review for your business that outlines the issues you need to address with several different solutions:

  • Begin by investigating whether you or your company has credentials compromised and posted on the Dark Web.
  • Every vulnerability will be explored, and determinations made about the best ways to shut these vulnerabilities down, so they can’t be exploited.
  • Once IT experts have all this information about the current state of your company, they will recommend specific security measures that you should take at once.
  • They will also recommend enhancements to all your IT systems and networks.
  • Lastly, your IT company will put in place much stronger measures to greatly reduce the chances that a cyber thief can break in.

You must be ready for the battle against cybercrime to avoid financial risk, and possibly the closure of your business.

For more information, check out these articles.

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5 Crucial Elements to Training Your Employees in Optimal Cyber Security

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