The Impact of Security Breaches
Posted on Feb 5 2011 at 07:41:36 AM in Security
Security breaches are not uncommon although the media is fond of reporting only high-profile breaches when for example, user registration details such as passwords, date of birth and addresses were compromised in a major hack. Most security breaches occur via the Internet external connection rather than from within an organization’s internal systems and usually come in the form of virus attacks, laptop theft or loss and interception of unencrypted sensitive data. Due to the fact that more data is being shared nowadays, information has become increasingly mobile resulting in more breaches for example, the frightening rise in reports of loss or theft of laptops, high-end gaming gadgets and removable devices.
When breaches occur they affect businesses as well as the individuals whose information has been lost however the focus of this article will be on the organizations. The first and most important cost of a security breach is the loss of hard-earned reputation that may have been built over the years. Customers and sometimes employees begin to doubt the ability of the company in protecting their data which could result in their departure from the organization. Also there are the financial costs of investigating the breach, contacting affected customers and responding to their concerns, damage control, replacing the lost device and compliance fines from the appropriate regulatory body. The situation could further deteriorate to lawsuits and settlements, loss of market values and decrease in productivity caused by diversion of resources such as credit monitoring for customers whose records have been violated. Indeed some organizations never recover from security breaches hence the need for prevention which although may be expensive but beneficial in the long run.