Internal Impacts of Data Breaches Lead to Lasting Consequences

Data breaches have lingering impacts on businesses of all sizes. Most of the publicized issues that arise from a cybersecurity incident are forward-facing, dealing with consumer rights, company reputation, and legal ramifications. But there is another layer that organizations need to keep in mind when facing a data breach – the consequences affecting operations of the business itself. From internal conflicts to plummeting profits, the aftermath can be much larger than what the public sees, or the press puts in writing.

If you want to limit the internal risks that data breaches can create, it’s critical to understand potential outcomes. Many business owners don’t account for these until it’s far too late. While there is growing awareness of just how detrimental a breach can be from the outside looking in, grasping the scope of a cyber incident from the inside out can better position an organization to rebound quickly and avoid worst-case scenarios.

Data Breach Destruction by the Numbers

Before examining the lasting internal consequences of a data breach incident, it’s important to touch on just how destructive they can be for businesses across the board. The number of data breach incidents affecting organizations of all sizes is rising, and 66% of small and medium-sized business have experienced a cyberattack within the last year. Many of these, out of business within six months of the incident. While larger companies have more tools at their disposal to weather the cyber storm, they are in no way immune from serious financial issues. 2021 has seen the highest cost of data breaches on record, with organizations suffering an average of over $4 million per incident.

Simply put, no business is immune from data breaches and the growing list of problems they create. Small-scale incidents can have serious financial implications, while severe cyberattacks can realistically spell the end of operations.

Tainted Reputation Repels Talent

Examining internal issues relating to a data breach incident or other cyberattack requires looking at public perception of a company and how current and potential talent perceives an organization. In the immediate aftermath of a data breach, there might be individuals who lose their jobs. These people may have made mistakes leading directly to the incident, or the company’s tainted public image might result in the need for the company to shake things up to show that progress is being made.

Saving face can be complicated on a good day, and downright ugly at other times. When employees or executives leave, they need to be replaced. But this can be more difficult to accomplish after a cyber incident. Economic signs are already indicating a worker shortage, making it challenging to find qualified individuals to fill vacant positions. Even if adequate professionals are available, the stains left on a business from a significant security breach can keep talent from accepting offers.

Corporate Leadership Struggles

Any significant cyber security incident will leave those involved looking for answers. While it’s essential to understand how and why the incident occurred, all too often, the blame gets put on leadership. Whether the data breach is the fault of a CEO or owner isn’t always relevant in the eyes of shareholders or employees. There is a need to hold someone responsible, which can cause conflict and struggle within an organization’s leadership structure.

This is especially true for incidents involving companies that have massive customer bases. When the data of millions of individuals is exposed or outright stolen, people feel frustrated and angry. It’s easy for them to assign blame, warranted or not, to company leadership. This pressure can increase internal strife as executives, managers, and employees attempt to pick up the pieces and put them back together again.

Trickle-Down Effects of a Bad Reputation

A single data breach can have lingering effects on the reputation of an organization. If multiple cyber security incidents occur, it becomes easy for the public to associate the company with these events for years to come. Even if things get resolved, and more secure practices are put into place, the stained image can be seemingly impossible to overcome. That ‘data breach’ moniker can haunt a business as it attempts to save face in the aftermath, and removing any negative association is no small feat.

This will result in trickle-down effects that lead to losses on multiple levels. The loss of customer trust can doom small and medium-sized businesses with smaller consumer bases. Word spreads quickly in the digital age. As customers become more informed on the importance of data security, they are less likely to stay loyal to businesses with poor track records. After losing trust, a downward trend in sales is sure to follow. And with many markets as competitive as ever, customers have many options to choose from. If they don’t feel like your business can meet their needs when it comes to cybersecurity or any other reason, they will be out the door and profits will plummet.

Limiting Internal Issues

While there is no way to prevent a data breach incident outright, there are steps that your organization can take to limit the risks involved when it does happen. Data breach planning and response services can provide you with the necessary help to better navigate a cyber incident, limiting the scope of adverse effects on a business internally and externally. Blanket identity theft restoration coverage can add value to existing products and services, keeping customers satisfied and increasing data security to the benefit of all parties.

A data breach doesn’t have to result in disaster for your business, but it certainly can. The potential internal issues described here should alarm you, but the goal is to spark effective action rather than to spread fear. Data security is an evolving concern, and staying ahead of the curve will better position your organization for ongoing success.

LibertyID is the leader in identity theft restoration, having restored the identities of tens of thousands of individuals without fail. If you retain personal information on your customers, now is the time to get data breach planning and a response program in place with our LibertyID Business Solutions data breach preparation program. With LibertyID Enterprise you can now add value to existing products, services, or relationships by covering your customers, employees, or members with LibertyID’s fully managed identity theft restoration service – at a fraction of our retail price – with no enrollment and no file sharing. We have no direct communication with your group members – until they need us.

Call us now for a no obligation proposal at 844-44-LIBERTY (844) 445-4237