Over 72 percent of Indian citizens think their personal data has been compromised, according to a recent article in Business Today. They blame a variety of organizations and institutions, which is understandable. Now imagine your organization is the one to blame. Could your company survive this type of hit to its reputation? Would it be able to retain customers who no longer trust you to keep their sensitive information secure?
Let’s take a deeper look into how a data breach might impact your reputation. Certainly, customer perception will be negatively impacted, but reputation and brand value will also suffer. Can this cause lasting damage? The short answer is yes.
While all breaches are not created equal, many companies will experience long-lasting damage and a severe hit to their reputation. According to a Forbes Insights report, 46 percent of organizations experienced damage to their brand reputation due to cyber security breaches: “When that technology doesn’t work, it’s not just a problem for the tech team; an organization’s reputation can suffer, and reputation is a board-level concern.”
The report also goes on to say: “Security and resilience affect nearly every part of an organization. Strategies to protect IT security and business resilience can align with a company’s broader corporate goals—from protecting intellectual property to maximizing productivity to minimizing customer defections.”
Of course, most companies seek publicity and press and have armies of employees clearly focused on these objectives, but data breaches are never publicity that’s sought after or wanted. In this case, you want to ensure that your organization flies safely under the radar. You want to safeguard your company’s valued reputation by avoiding media attention from breaches and cyber-attacks. Your No. 1 goal is to completely steer clear of being the subject of unwanted news stories that will harm your bottom line, brand, trust, and reputation.
The Federal Trade Commission (FTC) says experiencing a data breach can have significant consequences and having a plan for prevention and response is a must. The extent of the reputational damage can vary based on factors such as the size of the breach, the sensitivity of the data exposed, how the company responds to the breach, and the overall perception of your company by the public.
In a recent Threat Intelligence publication by Anupama Mukherjee, she highlighted the potential fallout an organization can expect from a data breach.
Loss of Trust and Reputation Damage: A data breach can erode customer trust and tarnish your company’s brand reputation. Customers may feel that their personal information was mishandled, and this can lead to a loss of confidence in your company’s ability to protect their data in the future.
Customer Churn: Customers might decide to stop doing business with your company due to concerns about their data security. This can lead to a decrease in revenue and market share, as well as the cost of acquiring new customers.
Legal and Regulatory Consequences: Your company could face legal and regulatory penalties. These penalties could include fines, lawsuits from affected customers, and compliance-related expenses.
Financial Impact: The fallout from a data breach can be expensive. Costs might include notifying affected customers, providing credit monitoring services, legal fees, PR efforts to manage the crisis, and potential compensation to affected parties.
Operational Disruption: Your company might need to allocate significant resources to investigation, response, and recovery efforts, diverting attention from other important business activities.
Negative Media Coverage: Data breaches often attract media attention, which can further amplify the negative impact on your company’s reputation. How your company is portrayed in the media can influence public perception and customer sentiment.
Long-Term Effects: Even after the initial fallout, the effects of a data breach can linger for years. It may take a considerable amount of time and effort to rebuild trust with customers and stakeholders.
Recovery Costs: Beyond immediate expenses, your company might need to invest in enhanced cybersecurity measures and employee training to prevent future breaches. These costs can be substantial.
Stakeholder Disapproval: Shareholders, partners, and investors might react negatively to a data breach, potentially impacting stock prices and partnerships.
When it comes to data breaches the likelihood of one occurring is no longer a question of “if” but “when.” So, it’s crucial to have a well-prepared incident response plan in place. According to the FTC, this plan at a minimum should involve notifying affected customers, cooperating with law enforcement if necessary, conducting a thorough investigation to understand the breach’s scope, addressing vulnerabilities, and communicating transparently and empathetically with the public.
Additionally, “prevention” as a strategy has never been more important. Stopping breaches, malware, and ransomware before they happen should always be the No. 1 priority. Forward-thinking cybersecurity practices, regular audits, and employee training are also essential to safeguarding internal and customer data. Having a proactive and robust cyber security strategy using a multi-pronged approach of technology, tools, processes, and expertise is the only way to go when it comes to fortifying your cyber security defenses.
This is where 11:11 Systems can step in and help. As your trusted managed security services partner, we have an unwavering commitment to assist you in safeguarding your most critical and important digital assets. Let us keep you and your company “under the radar.”
To learn more about data protection and managed security services please check out and download the following 11:11 Systems’ resources.