How do data breaches affect companies? Yes, they can affect consumers today. But companies can suffer more due to a data breach. How so? Read on to know more.
How Do Data Breaches Affect Companies?
Their Business Halts
As data breaches can affect consumers, they can also halt companies’ business operations.
One of the worst things that can happen is when a company is about to launch a new product or service. If a data breach happens during that time, the company may lose its potential customers. The company may even suffer from low sales and high costs because of the incident.
It Means a Huge Financial Loss
Data breaches can cost companies a lot in terms of money and reputation. If the company’s database is hacked, it could mean that each customer account in the database will be viewed by hackers. They can then use the information for profit or their gains.
Also, the company can suffer financial loss due to the breach. The company will need to pay for, for example, the cost of fixing the security, the cost of investigation, and the cost of hiring a
public relations firm. Of course, this can also mean a huge financial loss for the company if their customers decide to move on to another company. If customers lose confidence in a company because of the breach, they may choose to go to another company.
They May Face a Lawsuit
Companies are also vulnerable to lawsuits when data breaches happen. A customer can sue a company if his or her personal information gets leaked because of the data breach. It is considered a breach of privacy and can be illegal depending on the country’s laws. The customer may also file a complaint with the police if he or she feels that his or her identity has been stolen because of the breach.
It Can Cost Their Reputation
Reputation is very important for companies. If their customers lose confidence in them, their reputation will be at stake. It is the same case with data breaches. A company’s reputation can be harmed if the company gets hacked. And even if customers are not affected by it, it can still affect the company’s reputation. The company may also face a huge loss in revenue because of the incident.
It Can Lessen Their Customers
Customers may think twice before doing business with a company if the company has been hacked. If their personal information like their credit card number or social security number has been leaked, they may opt to do business with another company.
Do Not Let Data Breaches Affect Your Companies
For a company to prevent these things from happening, it must take data security measures. The company should have a good security program in place that will protect their customers’ information. They can also keep their employees from accessing the database by using a strong password. In addition, they should also have a plan in place on what to do if there is a data breach.