When we think of data breach and data loss, we generally think of large companies and millions of dollars lost in these events. What we don’t recognize, however, is that small businesses are not exempted from malicious activities. In fact, the effects of these attacks are even worse for small business owners, as its effects such as loss of customer trust and facing lawsuits, could affect their very survival.
If you’re a small business owner aware of how data breaches can threaten your enterprise, check out these three main reasons why even small businesses need data loss prevention.
1. Protecting sensitive data
This is the main reason and purpose for data loss prevention practices. Data loss refers to the misplacement, misuse, destruction, or corruption of data and in today’s context, it might be caused by a lot of factors, both internal and external. This requires data loss prevention strategies to be put in place. It covers a lot of grounds, especially if your business handles customer account information such as accepting their credit cards for transactions or hosting online payment options. Even more, it is important if you work with patient health information, which automatically subjects you to the Health Insurance Portability and Accountability Act (HIPAA). There are other business data protection standards such as the California Consumer Privacy Act, that lets consumers know what data you collect from them–and that you are liable for this data up to a certain extent.
It is important to understand that the protection of sensitive data doesn’t only apply to storing them within your premises or your equipment. Even when dealing with daily transactions, such as small stores that allow card payments, you still need sufficient protection against attackers. It even includes protecting your employees’ own information. Imagine losing your customers’ contact information or your team’s employment records. Even data loss for your internal company data can set you back days or even weeks of work, which ultimately translates to lost productivity and lost income.
2. Company reputation
Small businesses are not afforded the same luxuries as their larger, multinational counterparts. Aside from a unique idea and a limited working capital, what they usually have in their arsenal is good word of mouth to allow them to thrive and grow. This makes data loss prevention practices an important part of keeping your reputation. In this world where even small transactions can be done online, being recognized as a small business that handles data securely can help customers gravitate toward your business. This makes the adoption of continuous data loss protection plans one of the security trends for businesses of all sizes.
Failure to do so, and revealing that it was your small business that had the gap that enabled a data loss event, could lead to disastrous effects on the company. Small businesses don’t have the PR mechanisms and other recovery measures large businesses have to regain the trust of their customers. Without a strategy to handle data loss problems, you could see a sharp decline in customer trust and with it, falling revenues that could even force your business to fold. Aside from the risk of losing customers, it can also affect employee experience. Data losses from your internal side eliminate the sense of security that can in turn affect your employee turnover. You can’t afford to lose skilled talent because their sensitive information was compromised.
3. Financial stability
Ultimately, your small business relies on a steady stream of income to survive and move to its next stage of growth. While adopting a data loss prevention plan will cost your company upfront, it is actually an investment that will pay for itself in the long run. A study from IBM reveals that compromised credentials, the most common cause of data breaches, were responsible for a fifth of all breach events at an average cost of USD 4.37 million. Meanwhile, automation and AI-driven security measures were found effective in mitigating attacks and the financial burden that comes with them.
By keeping your data protected, both internally and externally, you can prevent having to spend a lot of money from attempting to recover compromised data or mitigating the attacks. A security plan in place will also spare your from the horrific costs of facing lawsuits from angry customers and regulatory bodies should it be found that it was your establishment that neglected its duty toward data security.
As we move more and more toward digitalization, data handling becomes more prevalent, and protecting them becomes more important. Although setting up data loss prevention measures can set you back a bit, its benefits far outweigh the risks you face without them. As even small businesses increasingly handle customer data, in addition to keeping their own organization’s data, being proactive about their security is becoming more of a necessity than a luxury. Assess your small business’s needs today, and keep it safe in the years to come.