How Data Breaches Affect Your Business’ Bottom Line

What matters here is that data breaches can cause detrimental damage to your organization, both from a reputational perspective and on your bottom line.


1 April 2014

How Data Breaches Affect Your Business’ Bottom Line

Data breaches have become regular news these days.  If you aren’t already taking preventative security measures within your organization, you need to. Why? Because your bottom line could be at stake.

Think about it. Would you conduct business with a company that fell victim to a data breach and lost millions, thousands or even hundreds of their customers’ most sensitive information? If you’re shaking your head no, you’re right. Recent research conducted by OnePoll and commissioned by Semafone suggests that a high majority of people will not do business with an organization which fails to protect its customers’ data.  Key findings of the survey reveal:

  • 86 percent stated that they were “not at all likely” or “not very likely’ to do business with an organization which had suffered a data breach involving credit or debit card details
  • 82 percent stated that they were “not at all likely” or “not very likely” to do business with an organization which had suffered a data breach involving a home address
  • 80 percent stated that they were “not at all likely” or “not very likely” to do business with an organization which had suffered a data breach involving a telephone number
  • 76 percent stated that they were “not at all likely” or “not very likely” to do business with an organization which had suffered a data breach involving an email address

It’s natural for people to become wary or distrustful when their personal information is stolen, which is why it’s no surprise that these findings reinforce what we already know, that organizations must protect and safeguard their information.

In a news release about the research findings, Semafone’s CEO Tim Critchley stated:

             Reputational damage suffered by companies who fail to protect personal data can translate directly into a loss of             business.  The protection of card details is no longer simply a matter of best practice – the economic                                 consequences of a failure to do so are potentially devastating for a business of any size.

To support of Critchley’s claim, Experian estimates the average cost of a data breach to be in excess of $5M – a figure that takes into consideration the loss of revenue due to outage, legal costs, brand name damage, system improvements, etc. If you don’t believe it, just take a look at the impact of Target’s data breach - the NYTimes reported that Target’s profit “fell more than 40 percent in the fourth quarter.”

What matters here is that data breaches can cause detrimental damage to your organization, both from a reputational perspective and on your bottom line – which makes security the utmost priority.  Remember, effective security measures are not a one-time effort; they require a continuous reinvestment in resources like hardware, software, process and employees.

Organizations can benefit from thinking through how to prevent threats like malicious insider activity, hacking, phishing and physical data theft and begin implementing information security best practices to safeguard information against these threats.

To learn how you can protect your company against a data breach, check out these “6 Steps for Data Breach Recovery and Prevention.”



Meagan Parrish

Meagan Parrish

Meagan Parrish is the Senior Manager of Social Media at Intralinks. She is responsible for social media strategy development and the communications for Intralinks' online communities. Meagan has been creating social media strategies for a variety of companies across verticals for the past several years. She holds Bachelor degrees in Marketing and Finance, with a minor in English Literature.