Risk management and cyber security analysts have focused on the substantial costs of data breaches for some time.
In a 2016 report, Ponemon Institute reported that the average total cost of a breach rose from $3.8 million to $4 million, with the per-record cost rising from $154 to $158. Naturally, companies have taken note of the increasingly large price tag of security incidents.
However, in the context of their overall risk management efforts, businesses see data security coming in second to another critical asset: their brand.
Another recent study from Ponemon and RiskVision outlines the prioritization of brand over data security. The study used a survey of 641 professionals involved in risk management, more than half of whom represent executive management. Of these respondents, 63 percent claim that they fear reputation damage; just 51 percent said they feel the same about data breaches.
Backing up that sentiment is a 2016 study from the Economist Intelligence Unit, which established a link between organizations’ brand reputation and cyber risk. The study found that a sizable majority of 282 C-suite executives consider reputation damage the greatest concern related to data breaches. While the direct costs of recovery can be a challenge, the potential long-term effects of a compromised brand are what really keeps leadership awake at night.
Analysts have seen little long-term impact on the stock prices of major companies that have suffered major breaches and recovered, which is somewhat reassuring. But there’s an important caveat: Those breaches must be handled quickly and effectively, taking the appropriate measures to prevent repeat incidents, to keep consumer trust from declining. Accordingly, experts say a proactive response is important in protecting a company’s reputation and can reduce the cost of repairing reputation damage after an event.
The Ponemon-RiskVision report indicated that the largest barriers between a company and its risk management goals were lack of resources, complexity and an inability to get started.
These are exactly the types of obstacles that Lunarline is prepared to help organizations overcome.
Managed security services, for instance, are an affordable solution for closing the resource gap without having to build internally. Network design and IT governance consulting services move clients past the complexity barrier and ease the difficulty in launching efforts.
For more information about Lunarline and the services we provide, visit Lunarline.com or contact us at 571.481.9300.