The cost of a data security breach may be staggering. In 2015, a health care provider, Anthem, had a cyberattack that exposed millions of confidential medical records. There is a federal law that health care companies must follow called the Health Insurance Portability and Accountability Act (HIPAA). Anthem settled its HIPPA violation by paying a fine of $16 million. That is a considerable amount for a fine. Data security may be one of the most important aspects of a business. Here’s why data security is important for businesses.
Companies Lose a Lot of Money
The most expensive part of a loss caused by a cyberattack is the cost of losing data and the work necessary to restore it. Even for smaller businesses, the average malware attack costs around $2.4 million.
Equifax is one of the three main credit bureaus. It was trusted with all the consumers’ credit history data. Its data and IT security were breached. This exposed hundreds of millions of confidential files. The estimated cost of the Equifax breach was a staggering $4 billion.
Companies Lose Trust
Consumers blame the companies that lose their confidential information because they have no way to blame anonymous hackers that may even be hostile state operators. Once the public trust is lost, it is difficult, if not impossible, to get it back. Facebook is currently going through a massive loss in consumer confidence.
Companies Lose Customers
Companies like Facebook build their revenue models on users’ participation. They build their company valuation on the number of active users. After Facebook’s data breaches were exposed, the number of Facebook user decreased and has continued to do so. There are many people now publicly calling for a mass closure of Facebook accounts.
Companies are Sued and Fined
The health care company, Anthem, with its fine of $16 million got off for a low amount. Lawsuits cost companies, who have a data security breach, many billions as well. Facebook is expecting fines from the US government to be in the multiple billions of dollars.
Companies can no longer afford to have weak IT security measures. Breaches of data security already cost hundreds of billions each year. The growth in cyberattacks is exponential. In 2020, estimates are that IT security breaches will quadruple.
By 2021, the amount of loss from data breaches is estimated to be $6 trillion a year. Small businesses are very vulnerable. Over two-thirds of the victims of IT security breaches are companies with fewer than 1,000 employees.
The costs are way too high. Companies must make substantial investments in improved IT security and have robust security protocols in place at all times. To survive these increased cyberattacks, they must follow the up-to-the-minute best practices for IT security.
For more information on data security for your business, contact Modern Office Methods today.