Published in Business Continuity
Data breaches can trigger fines, deflate stock prices, irreparably damage reputations, lose customers and attract more cyber-attacks.
But they don’t have to.
By responding quickly and decisively at the first sign of a data breach, you can limit its impact, preserve trust in your business and keep customers safe.
The consequences of a botched data breach response
For many small and medium-sized businesses, a hack can end their existence: 66 percent of them go out of business after a data breach.
Large companies are more likely to survive, but suffer severe damage. Shortly after Equifax announced a data breach that had compromised the personal information of 143 million Americans (recently updated to 148 million), it quickly shed more than $4 billion in market value as its stock sunk 20 percent. It hasn’t recovered.
The two massive data breaches Yahoo reported in 2016 gave Verizon a $350 million discount when it finally purchased the company in 2017. When it was revealed that Uber had kept quiet for more than a year about a data breach that affected 57 million people, the public outcry added to the growing reputational damage the company experienced in 2017, trimming its value by about 30 percent.
Throughout 2017 companies large and small suffered data breaches, often with a larger overall impact than necessary. If you want to mitigate the impact of data breaches at your company, and hopefully prevent them, follow these four principles.
- Act quickly
A data breach requires an immediate response from every part of your organization. Your IT and business teams will need to locate and close any vulnerabilities in your IT systems or business processes and set in motion your disaster recovery plan if they uncover a data corruption. Your business units may need to invoke their business continuity plans, and you may need to assemble your executive crisis management team.
You can improve the speed and effectiveness of your response with regular testing that will ensure everyone is ready to go and knows what to do as soon as a breach is recognized.
Another advantage is having the results of a Data Protection Impact Assessment (DPIA) at your fingertips. It details all the personal data you collect, process and store, categorized by level of sensitivity, so you’re not scrambling around after a breach.
With a clear sense of who should be taking charge and what exactly should be done, you can better contain the damage caused by the data breach.
- Be open and honest
A data breach is never ideal, but if your business suffers one, it’s important you inform anyone who is affected as quickly as possible. This will allow them to implement their own self-protecting measures.
We live in a highly connected world with hyper-extended supply chains. Create a crisis communication plan that sets out in advance who needs to be contacted should a breach occur. That way, you’ll never forget important stakeholders in the heat of the moment.
Failing to inform people in a timely manner can cost you in fines, reputation loss and disgruntled customers.
- Figure out what went wrong
After a breach, IT administrators should comb through network traffic archives to look for any abnormal activity. How did the breach occur? Was it a vulnerability that should have been patched? Innocent human error? A process gone wrong?
It’s equally important to review your DPIA to ensure it’s up to date.
If the breach is a criminal matter, make sure you pass on any and all relevant evidence to the police so that those responsible can be brought to justice.
- Pre-empt future attacks
Prevention is always better than cure. It’s good business practice to continuously monitor risk, including information risk and ensure the controls are adequate.
Conduct physical and logical penetration testing and check your organization’s susceptibility to social engineering. Ensure you have effective business continuity and back-up solutions in place. Check in on any vendors or partners that have access to your network to review their security practices and level of access. Seek out executive coaching to ensure that your C-suite has the skills, competencies and strategies to lead your organization through the complex, uncertain and unstable environment that is the aftermath of a data breach.
Facing the inevitable
Data breaches are growing more common, not less. How you respond in the aftermath of a data breach says volumes about your organization and how much you value customers.
If you delay disclosures; suffer repeated, preventable breaches; and leave vulnerabilities unfixed, you’ll shed customers and market value.
Quickly take action, however, and be proactive in your notifications of a breach and fixing vulnerabilities, and you’ll contain and weather a data breach better than most businesses.