Data protection is important for small businesses as well, despite the common misconception that it primarily affects big corporations. Every corporation needs data security since hackers and other bad actors frequently target small businesses to steal important data. When you implement data protection strategies, you can ensure that you maintain an excellent reputation, avoid operational downtime, protect your data, and protect your business from legal action.
Learn more about what data protection is and why it is important. Additionally, you might be curious to learn about the top dangers of not having data protection as well as some best practices for putting data security measures into practice in your company.
What Is Data Protection?
The term “data protection” describes several procedures and defenses put in place to keep an organization’s data safe against theft, alteration, compromise, and loss. By implementing data protection, organizations protect themselves and their customers from identity theft and phishing scams. Organizations generally work to protect the following types of data:
- Email addresses
- Telephone number
- Name
- Medical information
- Bank and credit card details
- Home address
Why Does Data Protection Matter?
With the increasing reliance on cloud and online transactions, many organizations are handling more and more data. Bad artists outside and inside an organization constantly attempt to compromise the organization’s data security for their self-interest. The purpose of data breaches is often to steal information from a company, sell it to others, or use it to carry out fraudulent actions.
Since organizations handle large amounts of personally identifiable information (PII) from their customers, employees, and stakeholders, data breaches can cause great harm. Data breaches that take very sensitive personally identifiable information (PII) like Social Security numbers, driver’s licenses, and passports can have some of the most detrimental consequences. If a bad actor gets this information, they can cause considerable damage to an organization and to anyone who gives the organization’s data.
Recognizing The Dangers Of Data Protection Lack
Small and medium-sized enterprises may mistakenly assume that they are not at great risk from data breaches. They generally believe that bad actors are more likely to target large organizations. However, this thinking does not live up to reality, as 43% of data breaches affect small and medium-sized businesses. Data protection is essential for all organizations, even if big corporations have the greatest number of data breaches. Small and medium-sized enterprises also experience a considerable number of breaches.
Credibility Issues
The biggest risk of not keeping your data safe is losing credibility between your customers and customers. Customers’ future confidence in the company’s ability to secure their sensitive information may decline even in cases when a data breach has no immediate impact on them. Because of this loss of trust, a large portion of customers will likely stop doing business with the organization and go to someone else for their needs.
Even while some patrons choose not to visit, they could voice their displeasure with the business in person or on social media. Along with negative pressure from users, an organization may face news cycles to discuss breaches and make more people aware of it. Negative stories from news organizations and customers can drive potential customers away from a company. Simply put, customers and customers want to keep their data safe, and if your business fails to protect their data, they will move into a business with a better data protection reputation.
Financial losses
Lack of data protection can cause financial losses to organizations. A report in 2021 found that the average cost of data breaches reached $4.24 million, a conclusion indicating a 10% increase over the previous year. Given the impact these financial losses have on an organization, Data Protection is essential.
- The high cost of data breaches usually comes from various actions taken by the company after the data breach, such as:
- Compensation to customers affected by violations
- Buying new security mechanisms
- Covering legal fees
- Paying for an investigation to find out how the violation occurred.
Legal Action
Legal action is another great risk that companies leave open when they do not have adequate data protection. Based on data protection regulations, organizations are legally required to show that they have taken the necessary actions to protect the personal data of their customers and employees. When data is tampered with and stolen from a company, people can take legal action against the organization, claiming compensation.
Data Loss
Sensitive personal information can be stolen as a result of a data breach, which can have detrimental effects on the company as well as any impacted customers. Hackers can cause major damage to someone’s personal information, using it to scam or commit fraud. As well as the impact of stolen data on consumers, it can significantly damage the company’s operations, as hackers will often delete stolen data.
In addition to specific information being stolen by hackers, many bad artists target companies with more specific data, such as medical records or biometric data.
Operational Downtime
The operational downtime that follows a data breach is a serious issue that many firms overlook when discussing data security. Once a data breach occurs, a responsible organization must first stop the breach and then investigate how it happened. This investigation will also require a review of access to the system and what data was affected. During the prevention and investigation phases, a company may need to completely cease its operations until the investigation is complete. Loss in revenue can be particularly damaging to companies that do not have a runway for too many savings or emergencies.
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