Effects of Security Breaches
Breaches come in many shapes and sizes, from rather harmless website defacements perpetrated by hacktivist groups or bored, gifted youngsters, to data being accidentally exposed, to data being stolen by professional crackers and later traded in the black market or used to blackmail the company (Krausz, Michael, and John Walker). Not all security breaches are of the same scale, and, naturally, not all breaches affect a company the same way. These security breaches result in a pronounced effect on a company’s bottom line, stock, and reputation
It may be quite obvious that the bottom line of a company’s checkbook is often directly affected by a security breach. Target suffered a large security breach in 2014 that …show more content…
In 2009 Heartland Systems, a payment processor for Visa, lost approximately ten million credit card records, and within a week their stocks fell by about 70 percent (Krausz, en al.). A loss of 70 percent in stocks is quite pronounced even for a large company. Furthermore, a 70 percent loss has a far more pronounced effect on the individuals who owned those stocks prior to the security breach. For an investor that owned stock prior to a security breach it would be an abysmal feeling to learn that nearly three quarters of an investment, potentially their only investment, was utterly lost in the blink of an eye. Also, the price of stocks effects other investments such as mutual funds which are frequently used to build a person’s wealth, or retirement savings. The effect of security breach on a company’s stock will inevitably hurt investors just as surely as it will hurt the company as a …show more content…
According to Morse, an annual average of 9% in online sales are lost because consumers don’t feel the internet is safe enough. That 9% of lost sales equates out to about 21 billion dollars. Consumers do not want to put their money in harm’s way, and security breaches make potential markets appear dangerous. For example, a February 2015 Reuters’ article noted that after Target’s data breach in 2014 their high quality shopping experience was tarnished since customers had to replace their check cards. Also, getting a replacement card is not typically known as a fast or easy process, and it is a major inconvenience in today’s world where plastic is more common than paper as method of payment. Additionally, it is unlikely that a customer is going to continue shopping at a company that appears to have a reputation of poor security practices.
Without doubt, a security breach will result in a negative impact to any company that suffers from one. The loss in monetary value will vary depending on the scope of the attack, but for large companies the loss easily reaches tens of millions of dollars. An already fickle environment, a company’s stocks will be directly impacted by a security breach. Also, the most human effect a company will endure after a security breach is the loss or damage to their reputation. It does not matter if a security breach is from bored kids, hacktivist, or hardened crackers
Breaches come in many shapes and sizes, from rather harmless website defacements perpetrated by hacktivist groups or bored, gifted youngsters, to data being accidentally exposed, to data being stolen by professional crackers and later traded in the black market or used to blackmail the company (Krausz, Michael, and John Walker). Not all security breaches are of the same scale, and, naturally, not all breaches affect a company the same way. These security breaches result in a pronounced effect on a company’s bottom line, stock, and reputation
It may be quite obvious that the bottom line of a company’s checkbook is often directly affected by a security breach. Target suffered a large security breach in 2014 that …show more content…
In 2009 Heartland Systems, a payment processor for Visa, lost approximately ten million credit card records, and within a week their stocks fell by about 70 percent (Krausz, en al.). A loss of 70 percent in stocks is quite pronounced even for a large company. Furthermore, a 70 percent loss has a far more pronounced effect on the individuals who owned those stocks prior to the security breach. For an investor that owned stock prior to a security breach it would be an abysmal feeling to learn that nearly three quarters of an investment, potentially their only investment, was utterly lost in the blink of an eye. Also, the price of stocks effects other investments such as mutual funds which are frequently used to build a person’s wealth, or retirement savings. The effect of security breach on a company’s stock will inevitably hurt investors just as surely as it will hurt the company as a …show more content…
According to Morse, an annual average of 9% in online sales are lost because consumers don’t feel the internet is safe enough. That 9% of lost sales equates out to about 21 billion dollars. Consumers do not want to put their money in harm’s way, and security breaches make potential markets appear dangerous. For example, a February 2015 Reuters’ article noted that after Target’s data breach in 2014 their high quality shopping experience was tarnished since customers had to replace their check cards. Also, getting a replacement card is not typically known as a fast or easy process, and it is a major inconvenience in today’s world where plastic is more common than paper as method of payment. Additionally, it is unlikely that a customer is going to continue shopping at a company that appears to have a reputation of poor security practices.
Without doubt, a security breach will result in a negative impact to any company that suffers from one. The loss in monetary value will vary depending on the scope of the attack, but for large companies the loss easily reaches tens of millions of dollars. An already fickle environment, a company’s stocks will be directly impacted by a security breach. Also, the most human effect a company will endure after a security breach is the loss or damage to their reputation. It does not matter if a security breach is from bored kids, hacktivist, or hardened crackers