There was once a time when important personal or corporate data could only be compromised by the physical theft of the documents or damage from a fire or some similar disaster.
Unfortunately, damage and theft these days can result from a much broader range of events. Too many companies are storing sensitive information such as Social Security numbers and credit card information on internal-use databases or other insecure locations.
Here are a few reasons why it’s imperative for businesses to take advantage of the available tools to protect their important information from being stolen or destroyed.
1. Legal regulations
Besides just being a good business practice, data protection is a legal obligation for many companies. Publicly traded firms or those that do business with a public company are required by Sarbanes-Oxley (SOX) to maintain strict IT controls over financial records and retain the ability to show records which demonstrate that IT control.
Online companies in particular are subject to the Payment Card Industry Data Security Standard (PCI DSS), which governs any company that processes, stores, or transmits credit card numbers. Under PCI DSS, merchants are required to use firewalls, antivirus software, network access control, and network monitoring to protect credit card data, or they will face harsh fines and risk having their merchant license revoked.
Businesses that handle patients’ sensitive medical data must follow the guidelines in The Health Insurance Portability and Accountability Act of 1996 (HIPAA). Even if a business doesn’t fall into the domain of one of these regulations, it should follow the same standards for its own protection and the security of its clients.
2. Loss of customer confidence
A customer whose important data has been lost by a company is far less likely to use that vendor’s services again. The likelihood that they’ll recommend that business to others also drops dramatically.
Beyond that, each loss of data results in a direct cost of around $200 to the company that allowed the data to be lost. This cost can result from legal fees, accounting and audit fees, phone calls, notification letters, and emails. There is also a serious loss of productivity when resources must be diverted away from normal business to deal with the data recovery.
Protecting important data is a smart financial endeavor because it prevents many of the costs associated with data loss.
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3. Identity theft
Identity theft is not a concern limited to private individuals. Companies can become targets as well. Once they have gained access, thieves can spend money out of business accounts and you are on the hook for the debts with possibly no way of recovering that money.
The consequences of this go beyond the simple loss of funds. If the crook’s actions are not detected promptly, the situation could end up having a negative impact on your company’s credit score. A loss of credit has far-reaching effects, from higher loan interest rates to decreased customer retention.
4. Accidents happen
Even if a company diligently checks its compliance with legal regulations and makes a concerted effort to prevent data loss and identity theft, accidents can still happen. Fires, floods, earthquakes, and human carelessness are impossible to eradicate. Having a backup copy of data will reduce the length of time between the occurrence of an accident and getting back to business as usual.
Retaining the help of a good data services company will more than pay for itself in time and expense. Those who know their data is secure can stop stressing over what would happen if the company’s records were compromised by malware, identity thieves, or a natural disaster.
There’s no reason to delay when there are so many threats to data security that can have a severe impact on your business and customers.