The retail industry is vulnerable to hackers, evident in the recent attack on eBay (News - Alert). The reason why such companies are targeted is that there is a gold mine of private information and invaluable data just waiting to be devoured. Should businesses be afraid? New research from SafeNet (News - Alert), a provider of data protection solutions, notes that financial breaches could be catastrophic for companies.
This feeling seems to be ubiquituous; survey results from over 4,500 adults across five of the world’s largest economies indicated that almost 65 percent of those surveyed expressed great reluctance to shop or do business with a company that has experienced a data breach where financial data was stolen.
And, understandably so; the relationship that a customer has with a company is built on trust and when there is a data breach, both security and trust are violated. The impact of a financial breach is likely to shake customer loyalty, which can have a negative effect on corporate revenue and corporate image, not to mention lawsuits and fines that can threaten the viability of the business.
In contrast to financial breaches, data breaches that merely involved personal identifiable information were thought to be less impactful and less harmful to organizations. Findings showed that 57 percent of the surveyed respondents reacted negatively when a data breach of that sort occurred.
According to the Q2 Breach Level Index, 237 data breaches occurred between April and June, 2014, exposing more than 175 million records worldwide, crippling many reputed companies. The figures are indeed alarming and given the high volume of data breaches in 2014, one wonders whether any kind of security encryption and authentication was ever in place.
"With the increasing frequency and size of data breaches, Cyber criminals are going after easier targets, and that is frequently personal data that is often unencrypted,” said Tsion Gonen, chief strategy officer, SafeNet.
Organizations that fail to address their security vulnerabilities will find that they have more on their plate than they can tackle. With stricter regulations governing the reporting of data breaches, more security lapses will come to the notice of an unforgiving public, and the point of ‘no return’ begins.
It’s time for companies to change their “it won’t happen to me” attitude and at least begin thinking, as Gonen says, “about protecting more of that data with strong encryption and multi-factor authentication.”