Data Loss Can (and Will!) Affect Your Entire Business
Data loss, on any scale, is an organizational nightmare. Not only do you have to restore data, any lost productivity that comes as a result of the data loss incident makes it difficult on the budget. That’s only scratching of the surface of how serious data loss can be.
You Lose More than Just Data
Your data is crucial to your whole business, and when you have some stolen or lost, it can be a problem for multiple parts of your business. Consequences don’t end there. Some businesses, if they lose enough data, would have to close, putting people out of work, and negatively affecting a lot of people.
Considering how important data is, take a second and try to calculate what the financial impact of a major data loss incident would be to you. Between discovering the problem and the resolution there is the possibility that you face downtime and a corresponding loss of productivity, negative exposure, and much more. In fact, a majority of small and medium-sized businesses will close their doors after a major data loss event; it is that serious.
Other Concerns, Regarding Customer Confidence
When we mention negative exposure, what we mean is that once your organization has the perception that you can’t protect their personal data, the customer base simply won’t trust you with theirs. For almost any business that looks at themselves as a responsible operator, this is a death sentence.
So What Can You Do?
Before you lose data, productivity, or customers you need to make efforts to understand who is taking this data. Typically hackers, sometimes working as a part of an organized concern are behind these data breaches, and while you focus on your business, they gain access through any means they can. With this diligent hacking strategy at hand, it is important that you, and maybe more importantly, your employees know what they are up against and are sufficiently educated. If the “weak links” on your network are properly trained and willing to adhere to industry practices designed to keep these issues from becoming problems, you will be a lot less susceptible to attack than the average business is.
The IT security professionals at Catalyst Technology Group deal with these issues every day and have the perspective and knowledge to help you and your organization mitigate potential security threats. We offer comprehensive security solutions that proactively monitor and manage your network traffic. We also provide employee training resources that ensure that the people you depend on know how to approach this new digital world where threats are as numerous as the benefits. For more information about how we can help, contact us today at (317) 705-0333.
Cyber Crime and Punishment: Who Is Accountable for Data Loss?
These days you can’t go a week without hearing about governments, companies, and other organizations dealing with major data breaches. It’s so commonplace that sometimes people don’t stop to consider the effect all these data loss events can have. As it pertains to the individual, there is always the chance, if a company gets breached, or loses data from a disaster or a hack, that your anonymity is a casualty. After the media attention fades, there are millions of people that are left exposed and companies, some huge multinational conglomerates, that don’t face any repercussions.
Some time ago, the U.S. Government determined that these general data breach events were an issue for individual state governments. State lawmakers are the only ones that currently have the jurisdiction to create and enforce data security laws in the United States. After an organization is breached, they are typically mandated to provide knowledge of the breach to that state’s Attorney General, who ultimately determines whether or not the state will sink resources into investigating and prosecuting the breached organization.
With data largely running the U.S. economy, however, there have only been two federally-mandated digital security laws passed in the last 20 years: The Healthcare Insurance Portability and Accountability Act (HIPAA) and the Gramm-Leach-Bliley Act (GLBA), which covers the healthcare industry and the financial services industry, respectively. Since data-theft-based crimes are still roundly federally unprosecuted, it has left a large amount of the business sector left to be protected by the various states’ attorney’s offices. In fact, the first complete trial for data theft was in 2015.
Other parts of the world have more overreaching data security mandates. In fact, the only financial entity that has a greater financial stake in world business affairs than the U.S., the European Union, has recently approved a comprehensive cyber security law called the General Data Protection Regulation (GDPR). The GDPR gives regulators authority to stop the transmission of data, or levy fines against businesses that lose individual’s information. The fines are substantial, too, ranging as large as $ 20 million or 4% of the organization’s revenue, whichever is larger.
Since the civil responsibility of prosecuting data security laws lies with individual states in the U.S., there has been a wide disparity of how these situations are handled. It is up to the state to come up with the penalties for offending companies, so different states have different penalties. Some states prosecute by violation, some by series of breaches, and some, strangely, by resident. Moreover, even if a company is prosecuted for the data that has been taken, there are only four current states (Arkansas, Illinois, Nevada, and Pennsylvania) and the District of Columbia that have given their courts the ability to collect reasonable restitution. Stranger even, some states bar individuals and organizations from taking action against entities that compromise their data, as only class action lawsuits are heard in these states.
There are times when state courts can come down heavily on an organization, as some have had to limit or stop operations completely, pending an investigation. The cost and lost revenue from having to halt operations, coupled with the damage done to the organization’s reputation, can cripple a business’ chance of ever resuming normal operations, even before the verdict, and resulting restitution, has been ruled upon.
The lack of cyber security laws on the books is being remedied in several states. Many state legislatures have, at the very least, proposed bills to give courts the ability to hear cyber security-related cases. Additionally, many states have already enacted mandates that make clear the amount given to a breached organization before they have to notify the State’s Attorney, as well as setting a baseline for the number of records that have been exposed before notification is required.
Cybercrime and data loss are major issues today, and the more they become prevalent, the sooner we expect the federal government to create additional mandates to protect citizens’ personal information.
How do you think data breaches should be handled? Do you think the U.S Government has to be more active on this issue? One thing is for certain, cybercrime is not going away. To protect your business from data loss and reputational harm, contact the IT security professionals at Catalyst Technology Group today.
The Fallout From Data Loss Isn’t Pretty
Data loss: it’s not a fun term for any business to hear. However, when one considers all of the ramifications that data loss can have upon a business, it swiftly transitions from “not fun” to “alarming.” Have you taken the time to think about what losing your business’ data would really mean for your company?
Downtime
There’s a reason that ‘downtime’ is considered a dirty word in an IT professional’s vocabulary. A loss of productivity is quite literally the opposite of what a company’s IT solutions should deliver. However, if a data loss incident were to occur without any mitigating measures in place, downtime is essentially guaranteed–along with all the negative consequences that it brings along with it.
These consequences include the financial impact that downtime will have on your business directly. After all, your business will not be able to generate revenue throughout the downtime incident, which means that the total amount you would have otherwise earned can be considered a cost. Combine that with the financial amount it takes to return to operations, as well as the potential business that has now been lost due to the downtime incident, and the sum total quickly becomes considerable.
Data Leakage
Of course, when considering data loss, the “why” needs to be established. If the answer involves your data storage being compromised by an outside party, you need to consider what data was lost. If it just so happens that personnel records were breached, exposing your employees’ personally identifiable information, or your customers’ financial data, you will almost certainly have some major problems on your hands.
Destroyed Reputation
Look at it this way: would you trust a company that had allowed your personal data to be stolen, putting your livelihood and good name at risk? In fact, would you trust a company that had allowed anyone’s personal data to be stolen? Probably not, and guess what? Your potential clients and customers feel the same way.
Whether they’re an existing client whose data was breached, or a prospect who heard about your issues with data security, there’s a good chance that they will lose any faith in your ability to protect their information. Therefore, existing clients will jump ship, and prospects will quickly turn to other options. Perhaps worse, those who were affected by your data loss will likely vent online, preventing many from ever approaching your business afterwards. While there are ways to mend fences with these clients, they are all expensive.
Clearly, data loss is something that no business is truly prepared to experience, which is why we’re here to help prevent it. To learn more about how Catalyst Technology Group can help protect your company’s data, give us a call at (317) 705-0333.