What are the risks of data theft?

With big data comes big risks…

This is even more the case in today’s growing digital era. Any company or organisation can be at risk of data theft if they’re not careful. That’s why cybersecurity is crucial to ensure that any risk of data theft is kept at a minimum. It’s not just about working hard to prevent cyber-theft, but it’s about working smart to stay one step ahead of the game.

The risks are huge.

Statistics

The risks are obvious: data leaks and data breaches place a company at a reputational and financial crisis, and most importantly, it puts the personal information of potentially millions of people under threat.

This is substantiated by the fact that one in ten people are a victim of fraud, according to previous figures published by the Office for National Statistics. The same figures revealed that you’re 20-times more likely to be a victim of online theft than being mugged on the street apparently.

Worrying stats!

Financial implications to businesses

Companies and organisations may face huge financial liabilities if they compromise data. This could be to compensate individuals who are affected by the breach; pay fines and penalties imposed by the Information Commissioner’s Office (ICO); and/or to invest in further data security measures.

The ICO is responsible for enforcing the Data Protection Act (DPA). If it finds that a company is in breach of the Act, they can enforce monetary penalties of up to £500,000.00, along with other criminal prosecutions and non-criminal enforcement it sees fit. This kind of penalty is reserved for the most serious breaches of the DPA, and next year, the allowable-fines will be able to run in to the millions in accordance with new legislation coming in to force.

TalkTalk was fined £400,000.00 after the ICO found security failings which contributed to a cyber-hacker(s) gaining access to more than 150,000 customer accounts ‘with ease’. A fine of this amount, coupled with the fact that companies will have to invest in extra security protections, may damage a company.

For smaller businesses it could be fatal.

Reputation

It’s argued that any financial impact from data theft can be recoverable, but the theft could damage a company’s reputation beyond repair.

A Unisys Security Index surveying more than 1,000 individuals found that more than three-quarters would stop dealing with a company in the event of a data breach.

This could be a huge amount for a small to medium-sized company; it could shut them down!

Customer vulnerability

Probably the most important risk that comes from data theft is the fact that customers may have had their personal information published, putting them at a greater risk of fraud and / or embarrassment depending on the circumstances.

Experian previously reported that they have seen the number of victims of fraud grow by 63% between 2010 and 2015.

Organisations must do better

While data breaches seem to be on a constant rise, companies and organisations must do their best to fend off cybercriminals; for the benefit of themselves and the victims.

It’s crucial that companies put in place adequate security systems to prevent the huge damage that data breaches can cause to people.

The ICO will be on hand to penalise those who fail to adhere to the Data Protection Act.

2017 has seen over 7 billion records breached!

Equifax takes financial hit following data breach scandal