Data Breaches – A New And Costly Fad

Anyone who’s been watching the news lately may have had cause to wonder about the data breaches reported by more than one major company. What’s probably most ironic is that even with all of today’s high-tech security measures, consumer data can still be obtained illegally via the data breach. Indeed, it seems as though data breaches have become something of a trend. And many experts say that the trend is going to continue for a long while.

Hackers Are Fine Tuning Their Targets

The reason why it isn’t suspected that the trend will end any time soon is because hackers are getting smarter. No longer are they casting a wide net and hoping that an unsuspecting consumer will give up their information. These days, hackers are taking a page out of retail’s book and working harder to understand the habits and preferences of the consumers whose information they are after. What makes this new targeting more dangerous than their former catch-all approach is that it is harder to track and analyze these more targeted efforts, and ultimately makes it harder to protect the consumer against it.

Taking Advantage of a No-Cash World

An increasing number of consumers is leaving their cash in the bank and using plastic. Whether credit or debit, the information contained on these cards is what hackers want. Not only do they know this, but they are aware of the high turnover rates for employees at retail stores, which means a higher chance that an unsuspecting employee will overlook a potential data breach.

The High Cost of Data Breaches

According to the latest survey published by the Department for Business, 2013 saw the highest increase in security breaches; three-fold in just the last year. At least in the United Kingdom, security breaches were responsible for 50,000 pounds in lost revenue for small businesses. Large firms lost a whopping 650,000 pounds to security breaches. Even bigger losers lost one million pounds or more.

These numbers don’t only allude to lost revenue, but also disruption to business due to the time needed to correct computer security issues and restore networks, as well as investigations of the breaches.

In the United States, it was estimated by a Symantec global report that each consumer record whose information is obtained by hackers costs a total of $188. Multiply that number by the number of records exposed to or stolen by hackers in recent retail security breaches, and it becomes easy to see how much of a financial hit a company can take.

Of course, monetary loss isn’t the only cost of data breaches. When a company is hit by one, the cost is deepened by the loss of customers, who take their business to competing companies. This causes companies to have to advertise to attract new customers, which also comes with a high cost. Called ‘customer churn’, this is noted as the largest source of loss when a data breach occurs.

But there is good news; experts say the cost per customer has dropped. Just two years ago, the number was over the 200-dollar mark. The reason for this, some say, is that customer churn because of data breaches has decreased.

Are We Causing Our Own Security Breaches?

This could very well be the case. Human error is impossible to prevent completely, and this has, more often than not, caused information to be more easily obtainable by unscrupulous individuals. Even something as simple as misplacing a device with information on it can cause that information to be stolen.

As well, many companies are simply not prepared for a security breach. For example, it was found that in the U.K., many companies had measures in place to protect their systems from malware and viruses, but not for the theft of data.

It is estimated that a large number of data breach attacks – as much as 80% – can be prevented, simply by the use of basic best practices like educating staff about how to handle suspicious-looking emails.

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