The Impact of Data Breaches on Customer Loyalty
Theft of critical information, damage to property, disruption of operations and most importantly, could lead to loss of customer loyalty. Here’s why
According to Norton, a data breach is an incident of compromised security where sensitive information is accessed by unauthorised personnel.
A study conducted by the Ponemon Institute states that, data breaches cost companies across the world an average loss of $3.86 million. This cost is made up of a number of factors that include loss of intellectual property, theft of critical information, damage to property, disruption of operations and most importantly, loss of customer loyalty.
Data Breaches and Customer Relationship
Customers share personal information with companies because they trust the organization to keep it safe and secure. No one wants their credit card information, purchasing histories or medical records leaked out to the world. When a cyberattack hits a business and results in a data breach, it leaves a negative impact on the customers’ confidence in the company.
A study conducted by Gemalto on 10,000 global consumers discovered that 62% of people believed businesses that hold their information are responsible for its security. When a company suffers a data breach and customer’s privacy is compromised, more than 70% of users stop using the service.
The Case of Yahoo!
Yahoo! was considered a digital pioneer and an internet giant until it was hit by multiple cyberattacks in 2013 and 2014. The data breaches affected 3 billion accounts and the hackers stole the customer names, phone numbers, email addresses, passwords and dates of birth. The attacks cost the organization a loss of $350 million.
The data breaches caused a loss in customer relationships. What made matters worse was that Yahoo! didn’t inform the public about the attacks for 2 years. Consequently, it lost its position as the internet giant to other search engines like Google.
Data Breach Response Plan
The threat of a cyberattack is always looming over your business, thus, it’s extremely important to keep your brand’s security system updated.
However, if a misfortunate event does happen and your organization suffers from a data breach, here’s how you can mitigate its effects on customer loyalty.
Be Transparent
Don’t keep your customers in the dark! Let them know what happened immediately because they have the right to know if their privacy has been compromised. This will show them the integrity of your organization and help can minimise the effects of a data breach on customer loyalty to a great extent.
Be Prompt
You should be quick on your feet after your organization has been hit by a cyberattack. Evaluate the damage caused by the breach; identify the vulnerabilities in your system and work to fortify the security of your business.
Let Us Help You!
Lean Security is a managed security and IT solutions company dedicated to providing clients with excellent services to help them keep their businesses safe and secure from data breaches.
Our team of experts can assess the technical vulnerabilities of your security system and identify what might be affecting it negatively.
Through penetration testing, network vulnerability assessment and quality assurance services, we can help you keep your security system up to date.
Call us at +61 (2) 8078 6952 for more information.
Benefits of Using A Managed Security Service Provider - Infographic
Let’s take a look at a few benefits of using a managed securing service provider.
According to the latest findings, more than 800 data breaches occurred in 2018 which was suffered by Australian companies.
Let’s take a look at a few benefits of using a managed securing service provider.
Top 4 Cyber Security Details New Employees Should Be Aware Of
Let’s dive in to top 4 cyber security details new employees should be aware of in order to reduce the chances of cyber perpetration.
With advancements in web technology, hackers have their hands on sophisticated tools that allow them to circumvent organisational cybersecurity. One of the most convenient ways for them to breach an enterprise’s security is through its employees. Statistics reveal that 95% of cybersecurity breaches happen due to human error.
Therefore, it’s important to minimise the likelihood of negligence among employees—especially new ones—by providing them with insights into the company’s cybersecurity methods.
Understanding cybersecurity best practices will reduce the chances of cyber perpetrators getting their hands on valuable company information. Let’s dive in to find out more.
Identification of Suspicious Links or Mails
It’s 2019, but phishing still remains one of the most popular ways for cybercriminals gaining unauthorised access into someone’s computer. Phishing has grown in sophistication over the years, as hackers try to make phishing scams more authentic and realistic.
Phishing is a hacking technique in which a pretender tricks a victim into opening a malicious attachment sent mainly via email or another communication platform. Once the victim clicks on the link, they are redirected to a web page that appears legitimate, but is actually counterfeit. The victim enters their private information, such as a credit card number, which the hacker then uses to fulfil their illicit intentions.
New employees should be trained to identify malicious links, websites, and especially, their emails; statistics show that 92 percent of malware is still delivered by email. They should never trust a sender’s name, look out for spelling errors, and never respond to the urgency trick.
Moreover, they should be instructed to contact IT administration before performing any additional actions—especially when they receive a mail from unknown sources.
Using Good Password Practices
Statistics show that 81% of company data breaches happen due to weak passwords. New employees must understand the importance of creating strong, unique passwords for all their accounts. The passwords should not include guessable words and consist of a combination of alphabets, numbers, and special characters.
New employees might not realise the importance of keeping a secure password. There are chances that they might write it down on their notepads in order to avoid forgetting it later or perhaps use the same password for every account, which can also amplify the risk of a data breach.
Therefore, it’s crucial that they’re provided with proper training on how to set up strong passwords for different devices and other dos and don’ts related to password creating, sharing, and storing to minimise the likelihood of any unfortunate event taking place.
Keeping a Clean Desktop and Mobile Device
It’s critical that your employees keep their digital devices clean and secure. This includes keeping a clutter-free desktop, avoiding duplication of files, and emptying their digital recycle bin on a regular basis. IT departments should communicate best practices of managing devices to new employees.
Furthermore, employees should turn on automatic software updates on all their internet-connected devices. Employees who bring their own device should strategise with the IT administrator to secure their device by installing antivirus software and by following other security protocols.
Reporting Cyber Threats
A timely report from employees of a suspicious link, malware, or any sort of cyberattack can potentially save your business from a big loss. Therefore, it’s pivotal to devise an effective reporting system related to cyberattacks. Each and every employee needs to learn about how to report cyberattacks at the first sign of one.
Along with suspicious links, any sign of adware, malware, or viruses should be immediately reported to the IT department. This will enable them to neutralise the threat and identify its origin, enabling them to take preventative measures to encumber it from recurring.
If you’re looking for a dedicated managed security and IT solutions to safeguard your business against potential cyber attacks, consider hiring the services of Lean Security.
We’re an Australian-based security firm that provides dynamic and effective solutions to our customers including penetration testing services among several others.
We’re a reliable penetration testing provider that offers complete security risk assessment to ensure that every modicum of your business application remains protected.
Contact us by calling +61 (2) 8078 6952 or send us an Email at INFO@LEANSECURITY.COM.AU for more information on cyber security best practices.
The Impact Data of Breaches on Customer Loyalty (Infographic)
64% of consumers worldwide are most likely to stop shopping from a business that had its security breached. Read what are the impact of data breaches on customer loyalty.
A data breach can cause bigger issues like customer loyalty. 64% of consumers worldwide are most likely to stop shopping from a business that had its security breached. Read what is the impact of data breaches on customer loyalty.
Proactive Risk Management-Making Your Business Resilient
Read how adopting a proactive risk management approach allows an organization to avoid and manage risks, making your business resilient to cope with an outside attack.
The global business environment has become significantly more complex in the last decade alone.
These transformational shifts—whether technological, relating to a larger scale of operations, or financial—have presented several opportunities for growth and success to businesses.
However, they’ve also amplified systematic risks related to economic, geopolitical, technological, and environmental concerns.
Therefore, it’s critical for companies to take proactive measures and embed risk capabilities in their strategic plan in order to steer toward resilience and ensure success.
Importance of Proactive Risk Management
Adopting a proactive risk management approach allows an organization to avoid and manage risks—both existing and potential ones—and enables them to shield themselves from crises and unfavourable events.
It also helps companies manage and measure emerging risks. Learning about potential risks, their probability, and their impact empowers organizations to minimize, if not eliminate, their losses.
Implementation of Proactive Risk Management
Proactive Risk Management is not a one-time process, but a continuous one that needs to be embedded as an integral part of the risk culture of an organization. It’s a discipline and a strategic control mechanism that a business has to incorporate in its overall business strategy.
How does it help?
The implementation of an effective risk identification and management plan limits a business’ exposure to potential identifiable internal and external risks. A proactive approach towards risk management can potentially save millions of dollars for organizations and maximize value for stakeholders.
The Challenges
There are several challenges that companies—especially SMEs—face when trying to develop a coherent risk strategy for their business. For instance, they may lack proper understanding in regard to the risks surrounding their business. Moreover, they might lack the relevant tools and required resources to make an effective risk management plan.
How to create a Proactive Management Strategy?
Effective risk management strategies need to be implemented by strategic level management. Senior management should set the direction and scope, middle management should handle the risk mitigation process, and lower level management should manage monitoring and reporting processes.
More importantly, businesses need to unify their risk management initiatives by using an Enterprise Risk Management (ERM) framework. This enables them to align their corporate strategy with business operations and helps them to address risk factors—both internal and external—that may have an adverse impact on the company’s success.
Some of the key steps include:
· Instituting a culture of risk awareness by providing regular training.
· Establishing an objective risk identification process on a routine basis.
· Equipping business units with relevant tools to perform risk evaluation and monitoring.
· Introduce compliance programs to address financial and regulatory risks.
· Define a process to categorize strategic risk opportunities that—if leveraged successfully—can generate positive returns.
Furthermore, an organization must also opt for a flexible approach to move toward a proactive risk management approach.
This will include making a distinction between Key Performance Indicators (KPIs) and Key Risk Indicators (KRIs), as the former is output-focused and can be manipulated easily.
Incorporating KRIs in the metrics will enable a business to understand how risky an activity is and plan accordingly.
Cyber Security in Risk Management Plan
According to a survey, cyber incidents such as data breaches, IT failures, and other cybercrime pose a huge threat to global businesses in 2019 and in the future.
An ICAEW report shows that the top five cyber risks that businesses need to address include:
· Ransomware
· Phishing
· Data leakage
· Hacking
· Insider threats
A comprehensive risk management plan includes well-developed cyber risk mitigation processes, procedures, and staff training that can help you protect valuable digital assets. There are several online guides available online to protect your business from cyber crimes.
Final Words
In essence, shifting from reactive to proactive risk management approach and creating an effective ERM model warrants restraint, patience, and—more importantly—a lot of discipline. A dynamic and proactive initiative will help your company to achieve effective governance an result in improved business performance.
If you are looking for dedicated managed security and IT solutions to safeguard your business against potential cyber attacks, consider hiring the services of Lean Security.
We are an Australian-based security firm that provides dynamic and effective solutions to our customers including penetration testing services among several others.
We are a reliable penetration testing provider that offers complete security risk assessment to ensure that every modicum of your business application remains protected.
Contact us by calling +61 (2) 8078 6952 or send us an Email at INFO@LEANSECURITY.COM.AU for more information on how to create a proactive risk management plan and make your business resilient.