How a Cybersecurity Breach Can Impact Your Business’s Sustainability, Revenue, and Growth
How Cybersecurity Breach Can Impact Your Business
Over the years, we’ve witnessed the dark side of cybersecurity breaches. High-profile incidents have seen CEOs and CIOs summoned before Congress to explain themselves and the breaches, often to an audience seeking someone to blame. Consider the fallout from the Target breach.
In a landmark case for the cybersecurity industry, Joe Sullivan, Uber’s former Chief Information Security Officer (CISO), was convicted and sentenced to jail for covering up a 2016 data breach that exposed the personal information of 57 million users and drivers. Instead of reporting the breach, Sullivan paid the hackers $100,000 in Bitcoin, disguising it as a bug bounty. This led to charges of obstruction of justice and failing to report a felony, marking one of the first instances where a CISO faced criminal charges and jail time for mishandling a data breach. This case underscores the critical importance of transparency and legal compliance in cybersecurity incident response.
Then there is the most heartbreaking case I’ve encountered in my 22 years in the field. One afternoon, I found myself on a call with a gentleman running a Professional Employer Organization (PEO). A PEO provides comprehensive HR services, including payroll, benefits administration, and compliance, through a co-employment arrangement, allowing businesses to save costs, ensure regulatory adherence, and focus on core operations.
As we discussed cybersecurity, he recounted a harrowing experience. He and his business partner had suffered a cyberattack in which hackers exfiltrated over a million dollars from their payroll accounts. He said, “Mike, no one talks about the fallout from one of these breaches. No one talks about the impact on your family, friends, and business reputation.” He continued, “My business partner took it very hard. He started doing drugs and drinking; eventually, he took his life.”
The importance of cybersecurity cannot be overstated. With 62% of businesses lacking an information risk management plan, the threat of a cyberattack is more imminent than ever. This blog post will explore how a cybersecurity breach can severely impact your business’s sustainability, revenue, and growth and what steps you can take to safeguard these critical aspects.
Sustainability
In the field of information risk management, sustainability equates to the recovery and restoration of systems and operations. Imagine a global on-demand transportation company that falls victim to a ransomware attack. This company, reliant entirely on online bookings and mobile app transactions, found itself unable to process bookings or credit card transactions for over 100 hours. The financial losses were staggering, amounting to millions, and even after eight months, full recovery remained elusive.
Every business must ask: How long can your systems be down before it becomes catastrophic? What would a day’s downtime cost your business? How about a week or even a month? We’ve observed businesses with operations disrupted for weeks and months. One multinational company took over 10 months to recover just 10% of its operations after a cyber attack. Answering these questions is vital for developing a robust recovery plan. Without it, your business’s sustainability could be gravely compromised in the event of a breach.
A quick question: If ransomware strikes today, who will you call, and what’s your plan? The old Ghostbusters query remains pertinent: “Who Ya Gonna Call?”
Revenue
Every cybersecurity incident or breach has a direct and significant impact on revenue. Statistics show that the average cost of a cybersecurity breach in the US is over $7 million. This figure doesn’t account for mega breaches but rather breaches involving as few as 10,000 to 100,000 identities. The financial toll of such breaches can be devastating, and it’s important to note that cyber breach insurance policies often fall short of covering the full extent of the damage.
A breach can lead to immediate financial losses due to halted operations and lost sales. Additionally, there are often costs associated with remediation efforts, legal fees, and potential fines. Then there’s the longer-term damage to consider: loss of customer trust and brand reputation, which can result in decreased sales and customer attrition. The period following a breach can be marked by a significant dip in revenue, and the road to recovery can be long and arduous.
Growth
The repercussions of a cybersecurity breach extend far beyond the immediate aftermath. The long-term effects on a company’s growth can be profound and lasting. For instance, when FedEx was hit by the WannaCry ransomware attack, the damages were so extensive that they announced they would not meet revenue expectations for the fiscal year. The implications of such breaches can affect a company’s growth trajectory for up to five years.
A breach can erode investor confidence, making securing funding for expansion projects harder. Additionally, the resources that would have been allocated to growth initiatives might instead be diverted to enhancing security measures and handling the fallout from the breach. This redirection of focus and resources can stymie innovation, hinder market expansion, and slow down overall business growth. This stagnation can be particularly damaging in an environment where competitors are always advancing.
Preparing for the Worse
Preparation is key to mitigating the risks associated with cyber threats. Here are four essential steps every business should take:
- Realize You’re a Target: Accept that your business is a potential target for cyberattacks and begin taking proactive measures.
- Conduct a Comprehensive Security Assessment: Address vulnerabilities across people, processes, and technology. Utilize assessments like our Secure24 evaluation to identify weak points.
- Develop a Comprehensive Risk Mitigation Plan: Create and regularly update a detailed plan for reducing your exposure to cyber threats. We can assist you in crafting this plan.
- Understand That It’s a Matter of Time: Recognize that someone, somewhere, wants your data. Prepare for the inevitable and ensure you’re ready to respond effectively.
To learn more about cybersecurity and its impacts on sustainability, revenue, and growth, and what you can do to protect your business, schedule a call with NCX Group to learn more about cybersecurity, its impacts on sustainability, revenue, and growth, and what you can do to protect your business. If you have questions, please message Mike Fitzpatrick directly on LinkedIn. Connect with us on Twitter and Facebook @NCXGroup, and don’t forget to subscribe to our LinkedIn newsletter for the latest updates.
By taking the necessary precautions today, you can safeguard your business’s future against the looming threat of cyberattacks. Remember, the storm is coming. Are you prepared?
PS…
Just remember, in the world of cybersecurity, there’s no such thing as being too paranoid. As they say, “The best way to predict the future is to create it.” So, don’t wait for a breach to happen—fortify your defenses now and ensure your business’s future is secure. After all, the only thing worse than having a breach is realizing you could have prevented it. Stay safe, stay vigilant, and may your passwords be ever in your favor. 🚀🔐
If you have questions, please feel free to reach out. I’m here to help.
Repost from LinkedIn – https://www.linkedin.com/pulse/how-cybersecurity-breach-can-impact-your-businesss-mike-fitzpatrick-bco6f/