What do you do when your business has experienced a cyber attack, do you alert the authorities or specialist or do you sweep it under the carpet in fear of embarrassment?
The formal advice is to report and avert any future threats that could be detrimental to the business, according security specialist Kaspersky, there is actually a correlation between the way a data breach is disclosed and the total financial losses an organisation experiences following a cybersecurity incident. SMBs that decide to voluntarily inform their stakeholders and the public about a breach, on average, are likely to lose 40% less than their peers that saw the incident leaked to the media. The same tendency has also been found to be the case in enterprises.
Failure to suitably inform the public about a data breach in a timely manner can make the financial and reputational consequences of a data breach more severe. Some high-profile cases include Yahoo!, who was fined and criticised for not notifying their investors about the data breach it experienced, and Uber’s fine for covering up an incident.
Based on a global survey of more than 5,200 IT and cybersecurity practitioners, shows that organisations that take ownership of the situation usually mitigate the damage. Costs for SMBs that disclose a breach are estimated at RM400k, while their peers that had an incident leaked to the media suffered RM700k in damage. The same is the case for enterprises: those that voluntarily inform their audiences about a breach experienced less financial damage (28%) than those whose incidents were leaked to the press – RM5.4 million compared to RM6 million.
Only around half (46%) of businesses revealed a breach proactively. 30% of organisations that had experienced a data breach preferred not to disclose it. Almost a quarter (24%) of companies tried to hide the incident but saw it leaked to the media.
Although minimal losses were reported by businesses that managed not to disclose the incident, this approach is far from ideal. Such companies are at risk of losing even more if — or more likely when — a cybersecurity incident is revealed to the public against their intentions.
The survey further proved that risks are especially high for those companies that couldn’t immediately detect an attack. 29% of SMBs that took more than a week to identify that they had been breached found the news in the press, which is double those that detected it almost immediately (15%). For enterprises, these figures are similar at 32% and 19% respectively.
“Proactive disclosure can help turn things around in a company’s favor – and it goes beyond just the financial impact. If customers know what happened firsthand, they are likelier to maintain their trust in the brand. Also, the company can give its clients recommendations on what to do next so that they can keep their assets protected. The company can also tell their side of the story by sharing reliable and correct information with the media, instead of publications relying on third-party sources that may depict the situation incorrectly,” remarked Yana Shevchenko, Senior Product Marketing Manager at Kaspersky.
- Everyone in the organisation should be made aware of protocols when the organisation experiences an attack, consider conducting special training for all parties dealing with the aftermath of a data breach this is vital to manage the communication and message that should be presented to the public.