You Lose More Than Data with Data Loss
Cybersecurity is more important than ever, especially when it comes to the issue of data loss. With a single hack, businesses can lose a ton of precious data. But what does that mean for your business?
Data loss is more than simply losing client information and trade secrets, though those things would already be a big issue for a company. This article will discuss the true costs of data loss that people don’t always consider. Additionally, we will discuss what you need to do to prevent data loss in the future (even if you’ve dealt with it already). You never know if and when another hack can happen, or when an employee can make a mistake. It is best to be prepared and take preventative measures to protect your data to minimize the threat to your business.
What is the actual cost of data loss?
In 2018, one study found that the monetary cost for data loss was approximately $3.6 million. This is close to $141 per data record. Data loss can be very costly, no matter how much data is lost, and the costs continue to rise. In 2019, the cost related to data loss had reached nearly $4 million on average worldwide, and in the United States alone, the costs are double the global average. The increase in costs raises alarms for businesses, making many people question whether or not their current cybersecurity protection is up to par.
As hackers continue to become more creative in their tactics and attacks against computers (both commercial and residential), the cybersecurity industry has the opportunity to try and stay one step ahead of the bad guys.
Plus, these hacks can be more devastating than previous attacks. That alone can lead to more costs (and the figures continuing to rise). That is why businesses need to take necessary precautions in protecting data.
However, data loss is not only linked to cyber attacks. It can be caused by other incidents that may be beyond human control.
Risks and hazards that contribute to data loss
Aside from cybercrimes, there are some risks and hazards that can cause data loss. Some of them are beyond human control.
Here are a few examples:
- Human error: Yes, human error is one of the largest risks and hazards of data loss outside of cybercrime. Specifically, two major factors are accidental deletions of specific files or a lack of competence. Unless backup measures are implemented, there would be no way of recovering any of the lost data.
- Natural disasters: Depending on the data center’s location, there is the threat of natural disasters. These include tornadoes, hurricanes, earthquakes, and many more. Any data area that lives in an area where they are vulnerable to natural disasters should have backup measures in place, just in case something happens. It’s challenging to predict when and where the next major natural disaster will happen. When it does, a data center could be affected by it. Thus, data loss can become a certainty if nothing is done to prepare and prevent it.
- Outages: Unexpected outages have been known to cause data loss. In the United States, a business could lose almost $8000 per minute. That’s nearly half a million dollars in a single hour. Such outages and data loss could financially cripple an entire small business. This is one more reason why backing up critical data is the best course of action compared to never doing it at all.
- No access to data: If you are unable to access the data, it can lead to the loss of data itself, as well as time and money. Without access to the data, a business’s productivity will suffer. Plus, the costs will be higher. Depending on the size of the business, they can stand to lose anywhere from tens of thousands to well over a million dollars in one hour alone.
The other costs of data loss
Needless to say, money won’t be the only thing that data loss will cost your business.
Here’s what you could stand to lose in a situation with data loss:
- Lost wages: Employees won’t have the ability to work because of how dependent your business is on data. Thus, they’ll have nothing to do. You send your employees home, and they don’t get paid because they won’t be able to work. This could hurt employees who are paid at an hourly rate.
- Productivity is halted: As mentioned before, your business may be dependent on data. It might be the fuel it needs to ensure that productivity continues. Without it, there is no work to be done. Because of its need for data, there are apps and systems that will stop working if there is data loss. With a stoppage in productivity, the costs begin to stack up. As the clock goes, so goes the money in the bank.
- Lost revenue: Because of data loss, productivity will stop, and the work won’t get done. This means that your business won’t be able to take and process orders, or will not be able to provide the promised service. When this happens, you will lose revenue instantly. No sales are made, and no orders will go through. Even though no money will be able to go in, money will always find a way out by way of your business expenses, employee wages, and so on.
- Potential fines: This will depend on the industry that your business may be in. Some industries have to take data handling even more seriously than others. Failure to do so can lead to fines (and perhaps even more serious consequences). The fines and penalties may range per record. One business in the financial industry could lose millions of dollars in fines alone due to its failure to protect sensitive data. The healthcare industry could also be fined for potential violations of HIPAA.
- A loss of trust and credibility: Customers and clients want to have the confidence in knowing their data is safe. If there is a data loss, that confidence will drop. Clients may lose trust in you because you didn’t do enough for data protection. Regaining trust and credibility will be a challenge for any business that has dealt with loss. This and trying to recoup their financial losses go hand in hand.
What measures should you take to prevent data loss?
As such, preventative measures should be taken in order to prevent future data loss. Yes, you can prevent it to an extent. However, there are risks due to incidents beyond anyone’s control (such as natural disasters and outages).
Let’s take a look at what you need to do in order to minimize such instances:
- Backup data regularly: This is self-explanatory. And a must-do task for any business that is handling amounts of data, small or large. Find a program that will allow you to back up data on a regular basis. This includes cloud services that will back up your data for a monthly fee (which can be higher depending on the amount of storage space you want). It may be an expense, but it can be one that will save you money and a ton of headaches just in case of disaster.
- Hire people who are competent in data handling: As mentioned before, human error is one of the more significant causes of data loss outside of cybercrime. For this reason, you must find people that will handle your data with care. They need to be knowledgeable and competent enough to handle it (and know what not to delete).
- Test your cybersecurity infrastructure: It’s important to test what software and systems you have in place to protect your business from cybercriminals. You’ll want to have a cybersecurity specialist perform penetration testing. They’ll try to find vulnerabilities that exist and seal them off from attacks if any are present.
Other than that, there is no way to prevent events beyond our control. We cannot predict the next outage, nor a major disaster like a tornado or a hurricane. That’s why it’s good to backup data and make sure it’s accessible anywhere else instead of having it all situated in one central place (like your office).
If you can find a cloud service that allows you to access data from anywhere in the world, you will have no trouble keeping your business data safe. Don’t take any chances keeping data in one single place, such as extra hard drives and computers.
Cloud data services need no physical hardware for storage on your end. All you can do is access it from a computer so long as you have the right credentials.
What is the difference between data loss and data leaks/breaches?
Data losses are when incidents occur leading to the loss of data. It can be either misplaced or lost to the point where it can never be retrieved. Meanwhile, data leaks or breaches are when information is accessed by cybercriminals and successfully stolen.
Either way, they are costly occurrences that can cost businesses a ton of money. Even if there is data left to be recovered, your business could lose money for time and productivity lost. Regardless, prevention of these occurrences is your best line of defense.
Frequently Asked Questions
What was the average cost for data loss in 2021?
In 2021, the average cost of data loss was $4.24 million worldwide. This was nearly a 10 percent increase from the previous numbers reported in 2020.
How much can recovery from data breaches cost?
Data breaches can occur and will not result in significant data loss. However, the recovery process can be just as costly. Data breaches can cost a business a total of $2 million. That figure can differ depending on the business’s size or the industry they are in.
How much will ransomware cost businesses?
In a 2021 report, cybercrime will lead to losses of more than $10 trillion worldwide. This also includes ransomware attacks, which may account for nearly $20 billion of those losses within the next year. The costs can vary from one industry to another. But collectively, the costs will add up.
How many cyberattacks happen daily?
Cyberattacks worldwide happen at least 2200 times per day. By these numbers, a cyberattack will occur every 39 seconds. That’s why it is essential to protect the sensitive data your business handles on a regular basis.
Why are data breaches so expensive?
The COVID-19 pandemic and the increase in remote work may have played a role in the increased cost of data breaches. Remote work may have led to slow response times, thus leading to increased costs – including nearly $750,000 alone to respond to cyberattacks and data breaches alone.
What was the most expensive data breach in history?
The most expensive data breach in history was Epsilon, which lost $4 billion in 2011 after a cyberattack. This affected many of their clients, including several large brands like JPMorgan, Chase, and Best Buy.
Your business may be at risk for potential data loss. That’s why it is important to follow any possible security measures to protect it from cybercriminals. Also, backing up such data on a regular basis is essential.
Occurrences beyond your control can lead to data loss if it isn’t backed up. That’s why you want to consider backup tools that rely on the cloud. You get plenty of storage space, and you can keep it safe regardless of what happens to your business’s technological infrastructure.
Don’t take any chances. Make sure everything is safe and protected so you can have peace of mind knowing your most sensitive data is safe.