27 December 2020: There is a correlation between the way a data breach is disclosed and the total financial losses an organisation experiences following a cybersecurity incident. According to a new Kaspersky report, ‘How businesses can minimise the cost of a data breach’, enterprises in the Middle East, Turkey and Africa (META) that decide to voluntarily inform their stakeholders and the public about a breach, on average, are likely to lose 38% less than their peers that saw the incident leaked to the media.
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 were fined and criticised for not notifying investors about the data breach it experienced, and Uber’s fine for covering up an incident.
Kaspersky’s report, 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 enterprises that disclose a breach are estimated at $983k in META region, while their peers that had an incident leaked to the media suffered $1.579 million in damage. The same is the case for SMB that operate in the Middle East, Turkey and Africa: those that voluntarily inform their audiences about a breach experienced less financial damage (19%) than those whose incidents were leaked to the press – $105k compared to $130k million.
Nearly half (53%) of businesses in META that have experienced a data breach went on to proactively, and voluntarily, disclose the incident, whilst around a quarter (26%) had their leak exposed to the media. Meanwhile, 21% of organisations that had experienced a breach did not disclose it at all.
Although minimal losses were reported by enterprises that managed not to disclose the incident, this approach is far from ideal. Such companies are at risk of losing even more 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 take over a week to discover a breach will see it exposed in the press, compared none if the breach is detected almost immediately. For enterprises, these figures stand at 18% and 30% 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,” comments Yana Shevchenko, Senior Product Marketing Manager at Kaspersky.