You may have read stories about the high cost of a network security breach – with average costs to repair the damage running into the millions – and think that it cannot happen to you. Or, if an incident does happen, it will not cost anywhere near that much.
While damages might be small when someone infiltrates your IT network security defenses and breaches your system, the impact and cost to your organization can be significant.
Costs of Poor Network Security
As well as the hard costs of not having a network security solution, there are hidden costs that add up quickly. Here are some of the biggest costs to consider.
Recovering from Data Breaches
If your IT network security is unable to stop unauthorized access and data breaches, the time and cost involved in repairing the damage add up quickly. According to an IBM report, the average cost of a data breach in the U.S. was $9.44 million as of 2022. Even small and medium-sized businesses can see hard costs of up to $18,000 or more. Worse yet, 60% of small businesses hit with data breaches go out of business within six months.
There may be a significant expense to notifying those affected. All 50 states now have privacy laws that require private businesses to notify people when their personally identifiable information has been exposed.
If you have an in-house IT or security team to repair the damage, everything else is put on hold until the job is done. You may have to hire outside help to recover as well.
Loss of Reputation
If cybercriminals steal your employee or customer information, it can lead to a loss of trust. Customers might be concerned about doing business with you in the future, and opt to work with your competitors. A study by the Information Systems Audit and Control Association (ISACA) reported that almost a third of customers stopped doing business with a company that had its cybersecurity compromised.
It can also hurt your reputation with potential customers, and your ability to recruit or retain employees.
Loss of Productivity
If your network goes down or slows down because of a security breach, malware or another type of cyberattack, it can cause significant disruption to your operations. You may be unable to use network resources, access business data or applications in the cloud, or even use your VoIP phone system.
Employees get frustrated and cannot work efficiently. If you lose data or have to repair the damage, you may be working at lower productivity rates for some time.
Dealing with Compliance Penalties, Fines and Lawsuits
Failing to have the right security tech and processes in place can cost you dearly. For example, failing to adequately protect health information under the Health Insurance Portability and Accountability Act (HIPAA) can cost $25,000 per violation. Retailers and sellers that fail to comply with Payment Card Industry Data Security Standard (PCI DSS) regulations can face fines of up to $500,000 and lose their ability to take credit cards as payment. Publicly traded companies can be fined up to $1 million for failing to comply with Sarbanes-Oxley regulations.
These fines do not account for any lawsuits that may be filed on behalf of customers or employees. Willful disregard for basic network security can potentially increase the damages awarded.
Fending Off Repeat Attacks
Once you have been a victim of a successful cyberattack, you are more likely to get hit again. Two-thirds of companies suffering one attack were targeted within the next year. About 10% were targeted more than 10 times.
This is especially common in ransomware attacks if victims pay the ransom. Eight in 10 companies that paid the ransom to recover their data were targeted in a second ransomware attack.
Increasing Insurance Premiums
A lack of a network security solution may result in higher insurance premiums. Insurance providers may see your business as a greater risk and hike your rates. In some cases, they may cancel your policies, forcing you to find alternate insurance providers at even higher rates.
Can You Afford to Take the Risk?
Compared to the real dangers and hidden costs associated with cybersecurity breaches, the cost of firewall network security is a smart investment. While you might be lucky and never fall victim to a cyberattack, the odds are that you will. One incident can cause significant financial damage, from which it may take years to recover. Can you afford the risk?
Contact LOGIX Fiber Networks online or call 888-505-6449 to discuss your network security options.
