Knowing how to prevent data breach is important because they have increased rapidly in recent years. For example, the 2020 FBI Internet Crime Report shows that the Internet Crime Complaint Center received more than 790,000 data breach complaints in 2020 alone, whereas businesses reported losses not less than $4.1 billion. According to the report, the complaints represented a sharp rise of 64% compared to the complaints made in 2019.
Besides that, data breach threats have become more sophisticated due to new technologies, such as artificial intelligence, machine learning, and 5G networks. As a result, cyberattacks are becoming harder to detect as the need to compromise secure networks and steal sensitive information increases.
Undeniably, the SolarWinds attack in 2020 is one of few high-profile breaches where hacker groups used sophisticated malware to steal sensitive data from the US Departments of Commerce, Energy, State, and Justice. The attack and many others demonstrate ways enhanced cooperation between state actors and malicious hacker groups have contributed to rising data breach threats worldwide.
Understanding a Data Breach
A data breach can be summarized as unwanted or unauthorized access to confidential information, such as financial information, personal data, social security numbers, and credit card numbers. Due to increased reliance on digital technologies, data breaches can affect anyone or an organization. Essentially, data breaches occur due to weak user behavior, security flaws, or a lack of relevant security controls within a network or information system.
Currently, the data breach threat surface has expanded significantly as almost all human activities have become more connected through mobile devices, social media interactions, and the Internet of Things (proliferation). For instance, the race to control the IoT market shows that users in the modern era value convenience over robust security. With many vendors releasing digital products with insufficient data protection mechanisms, such as two-factor authentication, encryption, and regular updates and patches, users are exposed to data breach threats every day.
On the other hand, even if all digital technologies had perfect data security capabilities, human errors would still result in cyber-attacks, causing data exfiltration. As might be expected, humans are the weakest link in data security since they often fall prey to social engineering tactics, such as opening phishing emails. Other practices, including sharing login credentials for critical user accounts, can result in ransomware attacks and theft of identifiable information.
Data Breach Costs’ Implication
A data breach can have adverse cost implications for a small business. A data security breach’s cost comprises the direct and indirect expenses an organization incurs in remediating the resulting impacts. For instance, the direct costs include expenses like potential settlements, outsourcing investigations to external forensics experts, and hotline support. On the other hand, the indirect costs include expenses used in in-house investigations, lost business opportunities due to system downtime or data unavailability, and damaged reputation.
According to IBM Security and Ponemon Institute, the worldwide average cost of a data breach currently stands at $3.92 million. The cost has grown by 12% within the past five years, largely driven by challenges in mitigating the outcomes of a cyber-attack, increased cyber regulations, and devastating financial implications of a breach.
The following are additional statistics showing the possible financial implications of a data breach:
- A data breach resulting from a Business Email Compromise can cost a company not less than $24,439 for each record.
- Data compromised through malware attacks has the highest financial implications since they cost organizations $2.6 million. Other expensive data breaches include denial of service attacks and web-based attacks.
- Organizations that implement data protection measures, among them integrating cybersecurity in the software development lifecycle, data loss prevention measures, and strong encryption, suffer lower costs. Extensive use of such data security measures reduces a data breach cost to an average of $360,000
- A data breach can result in lower share prices. According to experts, the share prices of breaches companies decrease by an estimated 14% only a few days after the breach has occurred.
- Almost $600 billion, which makes up close to 1% of the world GDP, is lost to security incidents every year.
Common Data Breach Methods in 2022
1. Ransomware Attacks
Ransomware is a malicious program that hackers use to prevent companies from accessing crucial information systems and data. In a ransomware attack, attackers demand a ransom to enable an organization to regain access and control over its data and networks. Ransomware attacks have increased in recent years due to emerging trends where malware developers create ransomware and lease to other criminals on what has been dubbed as ransomware as a service. During a ransomware attack, the attackers force the breached company to pay the ransom by threatening to leak sensitive information to various dark websites.
Ransomware attacks are dangerous data breaches due to several reasons. For instance, companies that pay the ransom end up with data leaks and corrupted data. Moreover, ransomware attackers control affected data, systems, and networks preventing the affected organizations from conducting any business activities. Also, a ransomware attack can ruin the reputation of the breached company since it means malicious actors have gained unauthorized access and encrypted customer information using harmful software.
2. Phishing Attacks
Phishing attacks are among the most widely used methods in breaching sensitive information. Attackers entice users to click harmful links or attachments in phishing emails to install malware or reveal confidential information to protected user accounts, such as login credentials. Since phishing attacks require little expertise or equipment to execute, phishing attacks are prevalent in most companies.
Common targets of phishing emails include company executives and individual system users. Through phishing attacks, attackers can trick victims into installing spyware and data exfiltration malware that steals and uploads critical data to a remote server under the hacker’s control. In other cases, attackers use phishing attacks to gain unauthorized network access by compromising the account security of phishing victims.
3. Insider Threats
Cybersecurity professionals consider insider threats to be among the most dangerous. Insider threats consist of individuals who misuse their access privileges to information systems and sensitive databases to commit cybercrimes. For instance, a disgruntled employee can collaborate with malicious actors to provide them access to intellectual properties.
However, insider threats can be intentional or accidental. Intentional insider threats are driven by motivations like monetary gain or revenge and may, therefore, instigate cybercrimes by using their access permissions to critical systems. On the other hand, unintentional insider threats are users who, through ignorance or inadequate training and awareness, cause accidental data breaches. Either way, insider threats are one of the biggest data breach risks organizations should be concerned about.
Best Practices for Preventing Data Breaches
The following methods describe the best way a business owner can prevent data breaches in their companies:
1. Employee Training and Awareness
System and data users are the weakest link in the implemented cybersecurity programs and the most vulnerable to data breach attacks. As such, enrolling employees inadequate information security training programs can help prevent data breaches from occurring. Employee training programs are essential in educating users on the recommended information security practices. A suitable user training program should sufficiently equip employees with the skills needed to detect phishing emails and the security mistakes to avoid when using sensitive customer or business information.
2. Endpoint Management
Since technology has become a vital aspect of contemporary business engagements, it is pertinent for companies to adopt acceptable methods to reduce the resulting data breach threats. Endpoint protection is a critical requirement needed to counter data breaches. Endpoints include all the devices employees can connect to a company’s network to access or transmit confidential information. Organizations can achieve network-wide visibility of all connected endpoints and control who can access which data through endpoint management systems. Moreover, endpoint threat detection systems enable continuous monitoring of all data traffic flows and provide real-time alerts upon detecting suspicious behavior that can cause a data breach.
3. Modern Data Backup and Encryption
Almost every business requires customer data to provide efficient services. Hence, data is the primary driver of business operations today and, therefore, the holy grail for most attacks. In this case, companies must observe stringent data backup and encryption practices to ensure continuous data availability and authorized access only, respectively.
For data backups, companies must ensure that employees make real-time backups in a secure cloud. Other backup methods, such as physical media like hard drives, are not as secure since they can be stolen or lost. At the same time, organizations must implement sufficient encryption schemes for data at rest, data in use, and data in transit. Encryption provides an added security layer since it ensures only users with the correct decryption keys can access the data.
4. Assess Third-Party Data Security Measures
The nature of modern businesses may necessitate an organization to share confidential information with third parties in the supply chain. As a result, the data may be used and stored in insecure environments, causing data breaches through a third party. Therefore, it is recommended that security teams perform detailed risk and vulnerability assessments to ascertain that the third parties accessing their sensitive information have achieved a strong cybersecurity posture. More importantly, such assessments demonstrate an entity’s serious intention regarding data protection to the external parties wishing to engage in any business activity.
5. Strong Password Security Policies
Password security is among the most used data protection measure among companies and individuals. That said, business owners must enforce strong password security policies. At a minimum, the policies should require users to create complex passwords that are hard to guess. Also, users should create unique passwords for different work accounts and work-issued devices. Employees can easily log in to protected accounts without remembering the complex passwords by using a password manager.
6. Timely Patch Installation and System Updates
At the very least, an organization must protect its data assets using antivirus software and other security tools. However, data breach prevention tools are useless if a company fails to install timely updates and security patches. Updating all computers and operating systems protects against attacks that seek to exploit unpatched vulnerabilities. In addition, maintaining up-to-date software eliminates all weak spots a hacker can exploit by mitigating existing vulnerabilities.
7. Restrict Access to Sensitive Data
There are several access control measures a company can use to limit who can access valuable information. However, the first step is classifying all organizational data according to sensitivity and value. The most sensitive data requires adopting robust data protection measures and access control mechanisms to restrict unauthorized access. Organizations can restrict access to sensitive data by knowing what personal information they have in their IT environment, scaling down information by keeping only what the business needs, locking the information that the organization keeps, and creating a reliable plan to respond to security incidents.