The financial risks behind data breaches

The financial risks behind data breaches

March 27, 2021 Off By admin

A recent study has shown a rather delicate reality with regard to the consequences of data breaches on the finances of video communication companies.

They could lose about $200 billion if, for example, they were affected by this phenomenon of cybercrime, or 3200% of their income.

In a study entitled "Invisible Tech. "Real Impact" published following a survey on the impact of computer crime on brands, conducted by two companies including Infosys, an IT consulting firm, and Interbrand, another specializing in brand consulting, it was mentioned that the 100 largest brands in the world are vulnerable and are at risk of incidents of data breaches that would cost them a whopping $223 billion.

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In addition, the study also looked at the long-term infringement impact on the value of these major global brands, regardless of the industry.

To quantify this risk, the two consulting firms that initiated the study are to identify the branding factors that are most affected when a company is faced with security incidents such as data breach such as affinity of trust and presence, and then make a simulation at the level of the brand threatened at the time of the violation using a trademark evaluation method that is specific to the Interbrand company.

To be successful in this survey and analysis, several in-depth documentary research, sharp exchanges with computer security specialists and a survey conducted in 15 countries by Interbrand was required.

According to the study's initiators, the two consulting firms, the study is intended to help companies better understand the risks they face if they are ever victims of computer security breaches. The report then provides a vision of how a cybersecurity strategy will need to be developed that will create an environment of perpetual vigilance to strengthen the protection of digital data, applications, computer systems and networks against the cyber threat. A growing threat.

The sectors that appear to be the most vulnerable in the event of a cyber security breach in the event of a cyber security breach include financial services, automotive and technology.

Based on the results of the study:

– The new technology sector is at risk of a loss of approximately $20 billion in the event of a computer security breach. This equates to 53% of the income provided by this sector in 2020, representing a rate of 116 percent of its profits.

– In financial services, the risk is $2.6 billion, the equivalent of 52% of financial services revenues in 2020.

– The automotive sector at its level is exposed to a loss of approximately $4.2 billion equivalent to 77% of its net income in 2020.

– In terms of consumer goods, we are talking about $5 billion, for 114 percent of net income in 2020.

– For the luxury sector, the risk to the value of the brand is $2.4 billion, which is equivalent to 115% of the sector's revenue for 2020.

In short, it can be noted that brands that have a significant impact on people's consumption habits are the ones that have the most to lose. This puts the brands of video communication at the head of which the risk of loss amounts to 3200 percent of their net income. Whereas for enterprise software brands, the risk is estimated at only 42% of their revenues.

"Cybersecurity has long been seen as a cost of doing business," said Vishal Salvi, Infosys' Director of Information Security and Head of Cyber Security Practice. He adds, "However, in the digital age, where a company's reputation is based on its ability to protect customer data and build digital trust, cybersecurity becomes a factor in commercial differentiation."

"Through this report, we are bringing a novel approach to quantifying the impact of a data breach on brand value to help companies understand and assess whether their cybersecurity investments are commensurate with the risk they face. It also reinforces the need for information system security managers to engage with the board of directors and build a strong governance ecosystem while using a "secure by design" approach to safeguard their brand value and reputation," he explains.

"As the boundaries between the physical and virtual worlds blur and brands rely more on the digital world to create unique experiences for their customers, data breaches have the potential to undermine the core of the brand's relationship with its customers. These changes underscore the need to re-evaluate the "hygiene" aspects of the customer experience, such as cybersecurity," says Ameya Kapnadak, Chief Growth Officer for India at Interbrand.

In addition, the report also described that 85% of customers surveyed said they cannot deal with brands that have been the victims of a data breach. 65% of customers immediately lose confidence when the brand is in a similar situation.

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