Data has become the most valuable asset for many companies over the past decade.
That increase in value comes at the expense of higher risk. Your customers expect their data to be safe and secure. That’s why more companies are taking practical and assertive data security measures to curb data losses.
As part of the data strategy and governance exercises we discussed in our last article comes incorporating vigorous security measures to help protect your data.
The real cost of a data breach
Many companies look at the dollars involved in robust data security investments and immediately get sticker shock. In reality, a breach can be far more costly and long-lasting – both financially and in impact to reputation.
A data breach can cost a company, on average, $3.86 million ($9.05 million for U.S.-based companies). This is factoring in the cost of investigating and detecting the breach, sending written and digital communications about the breach to customers and stakeholders, lawsuits and legal fees, administration post-breach costs, and lost business.
On top of the significant financial losses companies have to absorb from data security failures, the most costly impact is to reputation and loss of consumer confidence. As many as 80% of people lose trust in businesses that experience significant data loss, which undoubtedly leads to rapid customer attrition and low lifetime value of those customers.
When making the business case for data security reinforcements, Forrester developed a framework to help companies justify investing in data security measures to build customer trust and grow revenue called Total Economic ImpactTM, or TEI. When companies measure the benefits of privacy and data security improvements based on the potential loss against investment costs over three years, it’s possible to achieve an ROI of 17%.
80% of people lose trust in businesses that experience significant data loss.
Protecting your data and securing your digital products
When evaluating the integrity of your data security infrastructure and governance programs, we look at two key components: access control and level of encryption.
As you develop your digital products, remember you’re not just building a moat around your application to protect it from an external cyberattack. Data security threats can also occur on the other side of the trench.
In “The State of Privacy and Data Protection, 2021,” Forrester says 23% of confirmed data breaches were classified as internal incidents. Among these, “43% were caused by malicious intent (think accidental data loss, data theft by disgruntled employees, and unauthorized access of data), 39% by inadvertent misuse or accident, and 19% a combination of the two.
This is where robust and formal data governance policies come into play. When we evaluate security access for our clients, we look at the level of access for each user and identify any risks of misusing data.
Then there’s the data itself.
Encryption and protection
If someone attempts to access or share proprietary data illegally, is that information usable or attainable? This is dependent on your data’s level of encryption and security access. Confidential and proprietary customer data should be encrypted so that it cannot be used or accessed by unauthorized parties to adhere to data compliance guidelines,
To begin the process of strengthening your encryption and security, you’ll want to solve or accomplish one or more of the following:
- Ensure data cannot be accessed without a proper encryption key
- Data is password-protected and, ideally, accessible using multi-factor logins
- Roles and level of access are always current based on your data governance framework
- Data loss prevention protocols are in place based on how storage provider
How to ensure your data is secure
Sound data security helps support the data governance framework. To evaluate how secure your data is and the risks of it being compromised, evaluate data security in tandem with the governance planning.
- Create documentation to define the data classification per user – every user. This helps determine who has access to which data point throughout the data lifecycle.
- Evaluate the data privacy compliance based on the guidelines set by your data storage provider and based on your industry. You can identify potential risks and vulnerabilities within the data infrastructure through this.
- Conduct user admin interviews, systems analyses, enterprise access models, and data policies and procedures to ensure your data is accessible based on the appropriate user roles and as they align with your organizational goals.
The high cost of data loss will always be more than the cost of ensuring effective governance and security measures.