Data Breach

The worst nightmare for any organization is ‘Data Breach’. Broadly, the obvious drawbacks and loss can be encountered in terms of money and reputational harm however, there is more to that than meets the eye. The after effects of a data breach will have long-lasting repercussions to any firm especially in today’s age where customer’s private and confidential information is kept at highest regards.

A survey report-cum-research suggested by National Cyber Security Alliance (NCSA) stated that majorly small and midsize businesses have experienced a data breach and such firms forcefully have to see the exit doors within 6 months and finally coming down to halt of business operations.

Following are few of the cause and effect of such data breach that we have tried to elaborate and see what these points mean to any business who has experienced a data breach.

1) Rupturing Reputation Causing Loss Of Trust

A substantial data breach will lead to significant adverse effects such as devaluing company’s brand and reputation. One can certainly try to re-stitch the harm done with effective public relations strategy but much of it will go in vain. This will again be an expensive task to rebuild it, especially if the job that is outsourced. Undoubtedly, the firm is going to lose customer base which they will need to recover from investing more via marketing and sales channels.

2) Informing Customer

Irrespective of the situation, the company who has suffered data breach is required to comply with regulatory guidelines to send out a written notification to customers or users who may have been affected by it. These notifications explain to users about what sort of information may have been compromised. Though to most of us, it is not known but by law, the said company have to offer credit reporting service to all affected customers. However, in some cases, once the breach is identified and confirmed it is utmost necessary to inform regulatory agencies within a specific time period. It depends upon the size of the breach, however, for the large data breach incident it is necessary to report “without unreasonable delay”.

3) Affecting Productivity

A data breach is followed by the investigation as well as to identify the nature and cause of damage. In the meanwhile, during examining the extent of the damage everyday operation is brought to a halt in order to take the affected networks offline. But through the business perspective, it is still incurring the expenditure such as wages, rent, utilities, etc which will be accounted for loss in revenue. Additionally, such a break also has a huge impact on employee’s productivity, on the project’s efficiency and of course brings down staff’s morale.

4) Business Recovery

The cause of breach could have emerged due to a human error, inefficient cyber defence system or could be from both, a data breach does leave a hole open featuring the weakness within the organization’s security framework. This has to be taken seriously and needs top priority attention on the company board. To tackle this, it will require involvement from partners, employees and even cause a few of them to stay out of business for a while.

Most of all, the business would require to deal with legal consultants and security personnel who would conduct a thorough work report on security audit and network scan for business to recover. However, there is plenty of detailing and creating report would go underway in preparing risk analysis and risk management to ensure avoiding any future hacks. Moreover, if found that the breach has occurred due to a human error, more efforts would be taken for cyber-awareness training session module to keep the staff well informed and equipped for any future threats.

5) Increases Liability Factor

Data breach incident certainly leave many threads to be picked on for an organization. While few may be excluded with the ‘cyber-insurance’. It is also true that their premiums will be hiked following a data breach incident. This will also hamper the business’s credit score and will result in financial instability. The bottom-line fact is that the business will always have to pay (a little extra) when a data breach happens. Knowing the cost and being cautious will help companies is allocating resources properly so as to keep the financial loses at a minimum level.


The best way to keep such an incident at bay is by ensuring to have well equipped and informed staff with the tools equipped with the latest technological advancements. This will ensure efficient and secure job work.

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