A data breach can have disastrous consequences for any size business. A company’s failure to keep information – particularly personally identifiable customer and employee information – safe can result in millions of dollars in lost revenue and potential fines. Additionally, the impact on a company’s reputation can be significant. All organizations need to understand the risks associated with on-site data storage and take steps to prevent security failures.
The Risk of a Damaged Reputation After a Data Breach
Valerie O’Shoney, a specialty insurance professional at Beazley Group, commented about the causes and effects of data breaches and what organizations can do to prevent them. O’Shoney noted that the biggest concern businesses should have is the reputational hit they will receive from their customers.
“Once customers are notified that their information has been breached, they are understandably concerned and upset,” O’Shoney said. “Damage control is critical to mitigate the impact of a breach both on the victims and on the business’s reputation.”
In addition to the costs associated with lost business, companies that suffer a breach could also endure indirect costs from high customer turnover. For example, if a business’s reputation is tarnished, its marketing efforts will return far fewer positive results.
The Legal Implications of a Data Breach
Businesses that suffer a data breach are also likely to face compliance failure fines. Regulatory bodies worldwide have tightened their grip on data protection and privacy laws, imposing severe penalties on businesses that fail to adhere to the mandated compliance requirements. These fines can range from substantial monetary penalties to the suspension of operations, effectively crippling an organization’s financial stability and reputation.
Think the cost couldn’t get any higher? Following a data breach, organizations also run the risk of being subjected to litigation. For example, Infinity Insurance Company and parent Kemper Corporation were hit with a class action lawsuit over a December 2020 data breach that exposed customers’ and employees’ personally identifiable information. The lawsuit argues that the company failed to implement adequate data security measures, leaving digital files of information vulnerable.
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What Can be Done to Protect Information and Prevent Data Breaches?
There are a variety of precautions that organizations can take to protect their digital documents and files, such as installing cloud-based virus protection software, sticking to records retention and destruction schedules, and ensuring proper chain of custody.
But, what about physical records? Various regulations require the retention of paper records, which can be susceptible to a breach if they’re improperly stored or disorganized within the confines of the office. Storing files and documents with a professional records storage provider ensures physical records are secure.
Additionally, implementing and maintaining a strategic information governance plan will help prevent security breaches from happening in the first place.
The vast majority of organizations need to manage a mix of digital and physical documents, which is where a solution like Access Unify™ can help keep all your organization’s information secure, no matter the format. From making physical files available digitally to extracting documents from legacy systems, Access Unify prioritizes information privacy and security for your organization.