Data Breaches Can Be Far More Costly Than Compliance
Mar. 20th, 2019
A data breach can be a business’ worst nightmare. The costs of a breach are substantial and can have a negative effect on both the reputation of the company and economically as a whole. Not only are data breaches embarrassing and angering to those who had their information compromised, but there may also be some regulatory liability for a business that is hacked, especially if the measures taken to protect the information were not stringent enough.
A recent study has demonstrated the costs that are associated with data breaches. This study pegged the cost of the average data breach at $3.8 million, and this does not even factor in the costs for the large data breaches in which millions of records have been stolen. The costs associated with these hacks result from a variety of different measures that businesses must take when they learn that their systems have been penetrated.
The first thing that a business must do once it learns of a data breach is to contain it. This requires intensive activity, and containing the hack, unfortunately, does not happen overnight. Instead, it can take businesses months to secure their information systems again. Until a business can get control of a situation, countless hours of overtime may be necessary, and the costs for this can add up fast. In addition, there are steep legal costs too, as there are a variety of threats in that area in the wake of a data breach as well. The regulators will come fast, and legal help is necessary to deal with most of these inquiries.
Data breaches will almost assuredly cost companies some business. If the client is the federal government, the fact that there was a data theft in a previous contract could affect the company’s ability to get new contracts in the future. In the event that private clients have their information stolen, they will also be extremely hesitant to trust that company in the future. Unfortunately, much of a business’ value comes from its brand and a data breach will surely tarnish that brand.
It behooves companies to make sure that they follow the applicable cybersecurity standards. By protecting their information systems, companies stand a better chance of avoiding a large-scale hack that can place their future business at risk. The NIST standards that have been made mandatory to follow by the DFARS provide a starting point for companies that want to secure their networks. By complying with NIST 800-171, businesses can point to tangible efforts they have made. While hackers are determined and may still have the ability to penetrate a network, when a business is compliant with the rules, they can point to those efforts they have made in protecting their networks, and it can help placate regulators and the federal government customer(s) if there happens to be a data breach.
Compliance solutions for NIST 800-171 can help contractors in their efforts to make sure that their systems are protected. An investment made today on the front end will not only help a contractor keep its contracts, but can also save it from costly issues that may arise in the future.