Reputational
Reputational damage fuels the fire, sometimes with astronomical costs.
When investors and consumers lose confidence in a brand, they tend to shy away from supporting the company. They purchase fewer items or take their business elsewhere.
Investors have a moral duty to ensure cybersecurity initiatives are given priority during all stages of business development.
Once information about an attack appears on news and social media outlets, the brand’s image is immediately hurt.
Think about a restaurant – when there’s a claim about food poisoning or a health concern, you’re less likely to go there. It’s a similar mentality.
Consumers begin to worry that it’s unsafe to do business with the organization. This fear leads to lost confidence, which can cause consumers to drop the damaged brand for a competitor.
Customers can file lawsuits, or organizations face fines for non-compliance with data protection regulations.
When a breach compromised Facebook’s user data in 2018, the company’s total value dropped by $36 billion, a loss it’s still recovering from.
One of the most prominent breaches in history happened in 2013, when hackers stole credit and debit card numbers from 40 million Target shoppers and personal contact information from another 70 million.
Target met a swift fallout, spending 10s of millions of dollars on legal fees, customer reimbursements, software updates, and more. They faced over 140 lawsuits and saw profits plummet by nearly 50%. due to eroded customer trust.