Organizations today store an increasing amount of data. As that data grows, so does a company’s attack surface and the risk that they will experience data loss to either malicious threats or natural disaster.
The consequences of data loss can be dire for any business. One widely cited statistic, from the University of Texas, claims that “94 percent of companies suffering from a catastrophic data loss do not survive – 43 percent never reopen and 51 percent close within two years.”
The impact of data loss is real and dangerous for organizations, but it doesn’t necessarily always result in financial loss. Here are a few of the top impacts of data loss on business, and why you should ensure you have a robust data protection strategy in place.
What are the causes of data loss?
Data loss is a serious challenge for organizations today, resulting in the loss of important information, sensitive data and company files. This has two serious consequences for a business. Firstly for the operational processes of the company, and secondly for data privacy compliance laws.
There are a number of common causes of data loss, including:
- Hardware failure
- Natural disaster
- Ransomware attack
- Malware attack
- Human error
- Accidental file deletion
- Software malfunction
To mitigate the risk of data loss from these causes, check out our blog – 8 Data Loss Prevention Best Practices to Protect Your Business.
What are the consequences of data loss?
Data loss can be incredibly difficult to deal with, resulting in a range of consequences for a business from financial impact, a loss to brand reputation, regulatory compliance issues and many more.
Here is the impact of data loss on business:
- Damage to brand reputation
Organizations that store data from its customers, vendors and employees will likely suffer a backlash that damages its brand reputation after a data loss event. Stakeholders will want to know how their data was affected by the data loss and whether it fell into the hands of a malicious third party.
A study from Forbes Insights found that 46 percent of organizations suffered reputational damage after a data breach, while 19 percent suffered damages due to a third-party security breach. These reputational damages can lead to a loss in sales, customers and future revenue.
- Falling foul of data privacy regulations
Regulatory data privacy compliance laws dictate that businesses collecting, storing or using personally identifiable information (PII) in specific locations have a legal obligation to protect that data from falling into the wrong hands. When data loss happens, businesses are typically deemed to have lost or mishandled sensitive data.
Organizations that lose or mishandle data will face lawsuits from customers and regulatory compliance penalties. This not only leads to huge amounts of lost money in fines, but also impacts a company’s brand reputation and future sales.
- Employee productivity falls dramatically
When data loss occurs, employees suddenly lose access to all of the information they need to do their jobs. Instead employees have to work to recreate this information or work around it, taking them away from performing their actual jobs.
The result is a huge impact on the operations of a business, with a loss in productivity having major consequences for the company’s bottom line. In addition to that, data loss can make important business decisions, since the information required for data-driven decisions is now non-existent.
- Increases costs
Aside from any regulatory compliance lawsuit costs and lost productivity, data loss can lead to a range of increased costs in the short to medium term that make day-to-day-operations more expensive and significantly impact a company’s profitability.
For example, an organization may have to invest in data recovery services to get their data back.
Are you interested in learning more about data loss prevention and how you can better protect your organization?
We’ve created a unique surface attack management platform that gives businesses complete visibility into the data they store across their network, so they can implement a data protection strategy that better protects their data.
*** This is a Security Bloggers Network syndicated blog from Cavelo Blog and Press Release authored by Phil Guerin. Read the original post at: https://www.cavelo.com/blog/what-is-the-impact-of-data-loss-on-your-business