Data Security: What’s at Stake?

Like most companies, you are probably unaware of exactly how much a security breach will cost you. Every unique variable to your business can affect the final estimate, often by millions. But no matter what the size of your business or nature of your industry, a security breach unleashes unexpected costs that can cripple you financially, cost you valuable time, drive away customers and tarnish your company’s reputation.

The Costs of a Security Breach

Several sources have estimated that, when all of the individual costs are combined, a security breach can cost your company up to $305 per record, depending on the nature of your business and the regulations within your industry. This means that a significant breach can bleed millions — sometimes billions — of dollars from your bottom line.

Major Costs

To begin with, there is the cost of discovery, response and notification, which typically involves outside legal fees, increased call center activity, and marketing and PR response. Industry regulatory committees then impose heavy fines to deter other offenders. There is also the double-whammy of losing customers after the breach (with retail outlets getting hit especially hard) and the staggering price of acquiring new customers to replace them.
Finally, there is the cost of lost employee productivity, as they are diverted from their normal duties, while contractors are hired to assist in your response.

Indirect Costs

There are also a number of indirect costs that companies often do not take into account. There are restitution costs to the people affected by the breach. Non-financial penalties can also result, such as additional security and audit requirements. These include administrative, technical and physical safeguards and could become a substantial part of the overall costs as the law evolves in this area. Other liabilities can include the replacement of credit cards, the bank’s out-of-pocket expenses and more. A security breach also typically causes a decrease in a company’s stock value. While this value usually rebounds quickly if the breach is an isolated incident, systemic breaches can prove disastrous to your stock value.

What Should You Do?

A preventative approach to safeguarding your data is the best course of action for averting a devastating security breach. DataSpan’s DatacenterTrak^™ produces a comprehensive RFID-based asset tracking and data protection system to prevent data and IT asset loss, dramatically reducing the likelihood of a security breach. Simple, cost-effective and reliable, DataSpan’s DatacenterTrak will track and monitor every asset in your facility, satisfy your customers’ expectations for due diligence, and ensure compliance with all levels of privacy requirement legislation.

Learn more about DataSpan's DatacenterTrak.

 

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