Is ID Verification crucial to prevent Fraud, Data breach Money Laundering and revenue losses?
Today, nearly 80% of consumers expect their personally identifiable information (PII) to be protected online by businesses. Consumers have high standards and if these standards are not met, businesses face serious ramifications. About 48% of customers avoid services from a business after that business encounters a data breach. This leads many businesses to report long-term negative impacts on their revenue and consumer trust.
Businesses face constant, rising threats of data breaches each year. In fact, over 93% of all data breaches happen in less than one minute. Business executives find these cybersecurity threats concerning, especially since 80% of businesses take weeks to discover when data breaches have occurred.
The most significant ramifications of data breaches are discussed below. Find out why it is necessary for your business to work diligently to protect its data.
Brand Reputation Damage
Data breaches have long-lasting effects on brand reputation. If PII is lost during a data breach, it can lead customers to distrust your business. This is especially true if customer payment information is breached. If former customers distrust your business, they will hesitate to interact with your business. This will cause new potential customers to also distrust your business as well since they cannot be sure that the integrity of their personal data will remain safe. Security professionals agree data breaches have a negative impact on business reputation which translates into customers loss.
Loss of Revenue
Ultimately, if customers stop interacting with your business after a data breach, revenue loss is inevitable. Most businesses report big losses in revenue immediately after a data breach occurs. This statement is supported by data that shows 29% of businesses losing revenue after dealing with a data breach. In some instances, businesses lost more than 20% or more in revenue.
Loss of Proprietary Information
In some instances, hackers may choose to target intellectual property rather than consumer information when performing a data breach. This can affect the competitiveness of your business since competitors sometimes are willing to take advantage of the stolen proprietary information.
Many small businesses believe they are safe from data breaches, but this is simply not true. Nearly 60% of all data breaches occur at small businesses. Many hackers target smaller businesses for attacks because they are easier to strike.
Sometimes, data breaches have nothing to do with gathering information from a breached company. Instead, hackers perform vandalism on a company website. This may seem relatively harmless, but it can negatively affect your company if it happens. If improper information or vulgar content is added to your website, it can cause confusion and distrust among your customers. Plus, subtle changes to a website are harder to detect and notice by security personnel.
When it comes to data breaches, there are many long-lasting costs to consider. On average, businesses face $3.86 million in costs associated with data breaches. Many times, legal fees are a necessary expense. Money also needs to be spent investigating how and why an attack occurred. Furthermore, significant amounts of money need to be spent on marketing and PR after a data breach to rebuild a brand’s reputation.
Plus, fines can be imposed on businesses after a data breach as well. For example, in 2015 AT&T was fined $25 million for privacy violations associated with their 2014 data breach that affected nearly 280,00 customers.
Ways to Protect Your Business
Data breaches are on the rise. There was a 44.7% increase in data breaches between 2016 and 2017.
There are some security measures your business can take to protect itself. To start, if your business is large enough, create a dedicated security team separate from your IT department. Make sure the software your company uses is always up-to-date. This will reduce its vulnerability to attacks. Encrypting your data is another good option, especially when it must be shared by multiple people across your company. Also, train your staff to avoid opening emails from risky senders.
Why ID Verification is Important
Another important step you can take to secure your business is to make sure you are doing business with legitimate individuals. Performing identity verification during customer onboarding helps prevent stolen identities from interacting with your business. Just this one simple step can prevent fraud, money laundering and a whole host of repercussions that you may suffer if someone tries to use a fake identity to interact with your business.