In today’s digital-driven age, keeping business and customer data secure is more important than ever before. Not only are data breaches extremely costly, they’re also incredibly disruptive to business. Once a breach occurs, organizations have to move quickly to remedy it. Let’s hope customers won’t be too upset when they find out what’s happened.
Just how expensive are breaches? Hold your breath. A recent study revealed that the average data breach sets a company back $3.9 million. More granularly, they can expect to pay about $150 per compromised record. The price tag is even heftier in the healthcare industry, with the average breach costing upwards of $6.45 million. What’s more, U.S.-based companies feel the brunt of the pain, with the average data breaches setting them back $8.19 million.
But, when it comes to data security, financial impacts aren’t the only thing to worry about. Businesses need to be mindful of several other serious consequences, including theft of intellectual property and unhappy customers.
Theft of Intellectual Property
If bad actors access your company’s data—whether those individuals are rogue employees or hackers—you could be looking at much more than an immediate financial loss.
For example, when a thief steals intellectual property, they could subsequently decide to give your ideas to your competitors or sell them on the black market.
Theft of intellectual property is becoming an increasingly large problem for many organizations. In fact, it’s likely occurring more frequently than you think. Believe it or not, one in five North American companies recently reported that their intellectual property was stolen in the past year.
When a business experiences a data breach, it’s also a huge hassle its customers.
For example, 148 million customers were victims of the recent Equifax data breach, which cost a staggering $1.4 billion. Since no one actually signed up to be an Equifax customer, that’s roughly 148 million whose perception of the credit monitoring company was irreparably affected.
Will any of these customers trust Equifax again? What about other financial services organizations? Time will tell. But suffice it to say that there are plenty of unhappy customers running around America.
To prevent these suboptimal outcomes—high expenses, lost information, and unhappy customers—shrewd businesses are pouring more and more dollars into data security in order to ensure their networks and digital systems are secure.
What Is Data Security?
Data security is the process of protecting a business’s data and database systems from malicious activity.
These days, cyberattacks and data breaches are some of the main threats to data security. Employee carelessness can also play a role, too. A well-meaning employee might leave a laptop or smartphone at the coffee shop on accident only to have it fall into the wrong person’s hands.
Before you panic, though, remember that an organization with a robust data security strategy can largely protect itself from these threats.
With that in mind, let’s take a look at some of the specific benefits organizations can expect from implementing a strong data security strategy.
Benefits to Data Security
Data security delivers a number of benefits to organizations across all industries. Here are some of the more prominent ones.
1. Increased Compliance
Businesses that implement leading data security measures have an easier time ensuring compliance with current regulatory standards, including PCI DSS, HIPAA, GDPR, and more.
When you think back to the average cost of a breach, this is a big deal. Ensuring compliance helps organizations avoid fines, sanctions, and other penalties.
2. Reduced Expenses
Let’s face it: Staying up-to-date with leading technology costs money. But those costs are well worth it on the back end and pay tremendous dividends in the form of reduced expenses.
To be fair, it’s going to cost money to invest in data security initiatives and hire security engineers to oversee your infrastructure. But at the same time, businesses that don’t make the proper investments ahead of time could face catastrophic consequences down the road.
3. Improved Customer Trust
Are you more likely to trust a company that protects your data or one that’s in the headlines for breach after breach?
Everyone knows the answer to that question. When your customers know their data is safe, they’re more likely to be loyal to your brand. They are also more inclined to make repeat purchases and even recommend your company to folks in your network.
A recent survey revealed that over 75% of customers would avoid engaging with brands that have experienced a data breach. Keep your systems secure to keep your customers happy.
4. Increased Sales
If your business can securely store your customer’s payment information, you can reduce barriers to future purchases. For example, you can sell recurring monthly subscriptions for services. This removes the hassle for the customer of having to manually reorder an item.
At the same time, you can deliver an “Amazon-like” experience to your customers, enabling them to log on to your company’s website and buy something in just a few clicks.
Anything you can do to reduce the friction standing between your customers and a sale is well worth it.
Now that we’ve covered some of the benefits that data security delivers, let’s take a look at some security tips to keep in mind as you begin devising a data security strategy.
4 Data Security Tips for Your Business
As you begin putting together a data security strategy that works for your business, here are four tips to consider.
1. Determine Your Vulnerabilities
While every business is unique, IT infrastructure has the same vulnerabilities across all industries.
Looking to build an app? If so, you’ll want to make sure it’s built with the latest encryption technology. Does your business have a website? Then you’ll definitely want to implement transport layer security (TLS) to add protection to your site.
In both cases, you’ll also have to secure the cloud-based servers that your apps are interacting with.
2. Frequently Update Your Software
One of the most common attack methods occurs when hackers exploit outdated software or databases.
With that in mind, organizations need to ensure that their software is always up to date and that their most sensitive assets are protected behind their firewall.
3. Don’t Go It Alone
Considering the tremendous costs of a data breach, it’s simply not worth trying to save money by cutting corners on data security.
If you already employ an IT staff, consider adding a dedicated data security professional. If you typically outsource IT work, partner with a top-rated managed service provider that will look after your systems for you.
4. Require Secure Passwords
The use of weak passwords gives cyber criminals an easy way to breach your IT systems. Requiring both your customers and employees to use secure passwords—and change them regularly—is an easy and low-cost tactic for protecting your data.
Here are some of the current best-practices for secure passwords:
- Passwords should be at least eight characters long
- They should contain a mix of upper-case and lower-case letters
- Passwords should contain at least one special character and one number
You can also invest in a secure password managing service like LastPass.
5. Educate Your Employees About Cyber Security Risks
Believe it or not, employees are often the easiest targets that cyber attackers can exploit in order to breach an organization’s IT infrastructure.
Educate your employees about the most common cyber threats and how to identify them. By doing so, you reduce the chances that they’ll be tricked by malicious actors. As a result, your data will be more secure now and into the future.
Best of all, it doesn’t cost much to educate your employees. And at the same time, you’ll also be increasing employee engagement and long-term value to your business.
The Best Data Security Approach for Your Business
Unfortunately, there’s no single solution that exists for protecting your business’ data.
The best approach is a multi-faceted one that includes investing in technology, hiring the right people, and training your employees.
With so much at stake, businesses simply can not afford to overlook data security. By developing a data security strategy that supports business needs and putting the right people in place to oversee it, organizations can secure their networks, delighting their customers and increasing profitability along the way.
This post was written by Justin Reynolds. Justin is a freelance writer who enjoys telling stories about how technology, science, and creativity can help workers be more productive. In his spare time, he likes seeing or playing live music, hiking, and traveling.