Businesses are increasingly relying on computers to operate efficiently, so the protection of business and customer personal data on websites, networks, and devices is vitally important in today’s world.
We’ve often heard about large company data breaches where personal information has been exposed, but the reality is cybercrime is on the rise and any business, small or large, may be targeted. In addition to minimising your risk, it is also important to understand your obligations and the impact a breach will have on your business.
Mandatory reporting
Most organisations do not realise they have legal obligations under new legislation introduced by the government. Mandatory reporting ensures individuals whose personal information may have been accessed or disclosed are notified. A breach of critical infrastructure is also mandatory and helps the government manage national security risks.
Under the Privacy Amendment (Notifiable Data Breaches) 2017 Act, it is mandatory for you to report a breach where personal information has been compromised. If your business is not exempt under the Act, failure to report a breach exposes you to penalties up to $1.8 million. For most small operators this would be a business killer and some would probably lose their house.
Financial loss
Financial loss is the most immediate and biggest consequence businesses face due to a data breach. Investors of a publicly traded company may react negatively, and a company could experience a drop in its share price. In addition to any money or corporate information that could have been stolen during a breach, your business as a whole will be disrupted.
Systems may be completely or partially down, and employees won’t be able to work efficiently. Trading may be halted due to online transactions being unavailable, or consumers aware of the breach might choose to trade elsewhere. In dealing with a breach, you will also incur costs associated with repairing systems, networks and devices that have been impacted, as well as on going costs to overhaul any systems to increase security.
Reputational damage
Consumer trust is an essential asset in any business, so it’s important to protect the integrity of your brand by ensuring it isn’t tarnished. People share their personal information with you because they trust and believe your business will take the steps necessary to protect their data.
A cyber-attack, particularly one where personal information has been stolen, can very quickly damage your brand’s integrity and erode any trust customers have. Consumers are aware of the value of their data, so if a company is perceived to have not taken the security of their data seriously, then they will find a competitor that does. Unhappy former customers who share their experiences will also risk the loss of potential new customers.
Reputational damage can also affect your suppliers, impact relationships with partners, investors or other parties vested in your business.
Strengthening your cyber security
The best way to avoid the effect of a cyber-attack on your business is to stay a step ahead and ensure your systems are as secure as possible. To understand more about putting a security strategy in place to reduce threats and protect your brand’s reputation, please contact us.
