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The recent data breaches reported by Marriott International, British Airways, and many more enterprises, make one thing perfectly clear – no one is safe online. We’ve seen what happens once a company discovers that its clients’ data has been leaked. What we rarely see, though, is what happens after the data breach.
Companies are punished with heavy fines depending on a few factors, one of which is the nationality of their clients whose private information was compromised. While data protection acts are still improving in other parts of the world, the European Union took extra heavy steps last year with the implementation of the General Data Protection Regulation (GDPR) act.
Although based in the US, Marriott International had 30 million guests coming from the EU whose details were compromised. For failing to comply with the GDPR, the brand was fined up to £99,200,396 ($123 million). In another data breach case, British Airways was fined £183 million because of the GDPR’s regulatory standards.
The financial losses that companies incurred as a result of data breaches will be recouped eventually. As such, the monetary loss is often the least of their concerns. The bigger issue they have to face is their tainted reputation. Companies that become victims of a data breach are often criticized for not having enough concern for the well-being of their customers’ data. These issues will be at the root of bigger issues later on.
According to a recent survey of over 1,000 Americans, people are not likely to transact with a company again once it experiences a data breach. As per the results of the survey, 42% of the respondents are going to transact with retail stores again after a data breach. At the bottom of the list are ridesharing services with 7%.
The key takeaway from this is that regardless of whether or not the company recovers, it will lose a chunk of its customers due to mistrust.
Of course, once they’ve
faced all the consequences, companies have to implement new security measures
to prevent a data breach from ever happening again. Failure to show
improvements with regards to security will result in more heavy losses, whether
it’s investors pulling out or customers avoiding the brand entirely.
https://hostingtribunal.com/blog/biggest-data-breach-statistics/ are only getting fiercer. Companies will need to become more vigilant if they want to avoid the losses that come with such issues as, more often than not, it will take them years to recover from them.