Financial and banking institutions, healthcare providers and retailers stand to have significantly increased expenses and lose up to one-third of its customer/patient base after a data breach:
- 33 percent of consumers will shop elsewhere if their retailer of choice is breached
- 30 percent of patients will find new healthcare provider if hospital/doctor's office is breached
- 24 percent of consumers will switch bank/credit card provider if institution is breached.
Target recently quantified the reputational damage and sales impact of their recent data breach and stated it resulted in significantly reduced revenue following the announcement on December 19, 2013. However, the fiscal impacts expanded well beyond sales. Target saw stock prices drop and estimates $61 million in expenses to investigate the breach, offer credit-monitoring services, increase call center staffing and procure legal services.
Not only will revenue go down, but also expenses will go up. There is a great deal of data supporting a significant increase in post-breach expenses such as compliance, legal, and victim reparation costs.
The research finds identity protection services alone are a common cost to each industry:
- 54 percent of healthcare providers offer victims protection
- 40 percent of financial/banking institutions offer victims protection
- 30 percent of retailers offer victims protection.
To protect and manage sensitive data from breaches and subsequent misuse, ongoing risk assessments for the financial industry, retail merchants, and healthcare organizations including their business associates is recommended.
For these assessments to be successful, businesses should proactively create an internal sensitive data management initiative tailored to each organization encompassing the following five critical steps:
- Sift through irrelevant data and discover sensitive information
- Classify information and assign accountability to clean and protect
- Secure and remediate unprotected files / remove at-risk data
- Centrally monitor policies, actions, and good behavior going forward
- Report compliance with policy and regulation