The True Cost of a Data Breach

Tuesday, May 10, 2016 7:30 am, Posted by Absolute Destruction

We’ve bandied about the consequences of a critical data breach in relation to the various privacy protection laws in this country for years now. But have you ever read these laws on your own? It may come as no surprise to discover that PIPEDA and PHIPA are written in typical legalese, which makes their regulations difficult to understand. Regardless of their complexity, they’re still the law. Not following their directives can result in costly fines and unmeasurable damage to your business’ reputation.

The nature of data breaches will differ from industry to industry and company to company. Some will be negligible while others will blow up on a large scale. Several prominent organizations have studied commercial identity theft and broken it down the averages in black and white, making it easier to understand what’s in store for your company should you suffer from a breach.

Each year, the Ponemon Institute publishes a study on the cost of data breaches. Their fifth (and most recent) survey has shown that the cost of data breaches has continued to rise since the study’s inception. Their report analyzed information provided by companies from over 15 different industries, including medical and healthcare services, retail, financial, and marketing industry. They consolidated the stats and came to an easily disseminated review.

In two years alone, between 2013 and 2015, the number has increased by 23%. As a result, the cost of the average breach has seen exponential growth as well. The statistics are astounding. Every single stolen article or file costs the average company somewhere between $145 and $154. The chances of a breach involving only one confidential record are incredibly unlikely. In fact, the Ponemon study shows the average breach involves approximately 5,000 to 101,000 files. That makes the average cost of a data breach – all told – $3.8 million.

That’s quite a price tag, especially if you’re a relatively small enterprise without the multi-billion dollar revenue of certain multinational companies. This also doesn’t take into account the damage a breach can cause to your reputation. A large data breach can be a PR nightmare. Those clients affected in the theft will resent you for the risk you’ve opened them up to. Meanwhile, future customers will be wary to trust you, as they’ll see you aren’t taking the appropriate security measures to protect their information.

What are the appropriate security measures? Taking the time to invest in employee screening and training, adaptive digital security policies, and reliable document destruction is integral to preventing an attack. As you meet with your CIO, Board of Directors, and IT department to draft a comprehensive security policy, give us a call. We can schedule mobile shredding for your physical and electronic data that fits your needs. Whether that’s once a day or once a month, our fully bonded and uniformed shredding personnel will arrive at your doors and ensure not a single file – paper or otherwise – leave your place of business in a way that can be read and exploited.

Avoid having to pay the price of a data breach. Beef up your security, and give us a call – before it’s too late!

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