FALL 2023 7 SOLUTIONS How Do Data Breaches Occur? Data breaches—when cybercriminals access data and sensitive information —are on the rise against businesses of all sizes. To protect your business from these attacks, it’s helpful to first understand how they take place. Typical strategies include: Physical Actions – You may think cybercriminals are savvy hackers that only access data remotely. However, another common way they gain access is through physical actions. For example, they could steal paperwork, laptops, phones, or storage devices. Social Engineering – Phishing is when cyber criminals send malicious emails that look real to get access to sensitive data. They may send an email that looks like it came from your company’s IT department requesting a staff member’s password be changed so they can access their accounts. This stolen data can then be sold or used to commit fraud. Human Error – Not all data breaches are due to malicious activity. Sometimes an employee leaves sensitive information somewhere where it’s not protected, or accidently sends it to the wrong person (or people). Data Breaches are Costly for Small Businesses While data breaches at giant corporations are the ones that make the headlines, small businesses can also become victims of data breaches—and face substantial costs as a result. Small business owners who don’t make it a priority to protect their customers’ personal information could even find themselves out of operation. There are two categories of costs to consider: Hard Costs One of the largest costs of a data breach come from the credit and debit card companies. These companies have broad powers and rights in data breach situations, especially if the business was found to not be complying with Payment Card Industry (PCI) regulations, which govern the specific security measures businesses must adhere to when they accept debit and credit cards as payment. If there’s a breach of PCI, credit and debit card companies have the right to level fines on merchants. Those agreements also entitle them to charge back any fraudulent charges that take place on customer cards because of the data breach. In addition, businesses will have to pay the costs of alerting their customers of the data breach, paying for their credit monitoring services, investigating how the breach occurred, and taking steps to ensure it doesn’t happen again. Cyber insurance can mitigate the hard costs of a breach by covering these types of expenses. Soft Costs Many businesses in these situations also experience decreased productivity because employees are understandably more focused on “putting the fire out” than on their regular day-to-day job responsibilities. When productivity suffers, sales and profits go down. Other soft costs related to a data breach include the potentially devastating damage to the reputation of the business and the trust of its community. Customers, vendors, and other colleagues may start to question their relationship with the affected business, jeopardizing its future success. Panora Fiber can help protect your business against data breaches and other IT threats. To learn more, call us at 641.755.2424 in Panora or 641.332.2000 in Guthrie Center.
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