Cost of data breach is more than money. Here’s how.
In a data-rich but time-poor society there is an increasing dependence on technology to lessen the pressure on time. As organizations across industries globally adapt to this new phenomenon and build an impeccable blend of physical and virtual brand experiences for their customers, they are also faced with elevated consumer expectations.
Consumers today are not only choosing convenience but are putting their faith in brands with an implicit digital trust. And this trust cannot be tampered with, say experts.
“Studies have shown that 65% of consumers lose trust in the business in the event of a data breach, and 85% don't want to deal with their business ever again,” says Sumit Virmani, Chief Marketing Officer at Infosys.
Brands that are considered as economic assets whose value signify the overall earnings of a business, can also experience a significant impact if there is a break of trust in the form of a data breach.
Ameya Kapnadak, Chief Growth Officer at global brand consultancy firm Interbrand says that the failure to protect a customer’s data which was shared with an implicit trust can lead them away from the brand.
This impact can be experienced in their presence, affinity and trust, states a joint study by Infosys and Interbrand - ‘Invisible Tech. Real Impact,’.
The report notes that the potential risk to brand value due to data breach to the world’s 100 most valuable brands could amount to as much as $223 billion. Security, hence, can no longer be just a hygiene factor for brands.
Vishal Salvi, CISO and Head of Cybersecurity Practice, Infosys, says that the loss caused by cybersecurity is expected to reach up to $11.5 trillion by 2025.
“So clearly, there is a quantifiable impact,” he notes.
This impact is not only visible in the monetary form but also creates a longer-term invisible impact on a brand, says Salvi, adding that many organizations do not recognize it unless it impacts them directly.
“Unless and until you see it yourself, and you experience it yourself… the general human psyche that it is not something that is going to happen to me, or my organization. Until it happens,” Salvi says.
Experts also believe that data breaches could have long-lasting impact on brands across industries. And while the realization is still catching pace, the discussion, however, is fast reaching the boardrooms.
“This whole thing about security is now all of a sudden, up right there in the consciousness,” says Kapnadak, adding that it’s not just one, but every company, in every industry, is equally vulnerable.
The study calls out industries across the board such as Technology, Financial services, and Automotive, which might suffer a higher overall brand value at risk from data breaches. Luxury brands and Consumer Goods, on the other hand face greater value at risk as a percentage of their net income.
“It just shows the enormity of impact it can have if the boardrooms and the senior management of an organization doesn't attribute the right prioritization, for a potential cyber breach,” says Virmani.
This visible impact is changing how organizations are looking at cybersecurity, says Salvi.
“Many organizations are now taking cybersecurity as one of the top five risk for their organization just to make sure that they are able to protect their reputation and protect the brand value in front of their stakeholders,” he says.