The digitalization of our society brings many benefits: it saves us time, we are reachable everywhere, work more from home, shop online, pay faster, can view our medical records, and so on. However, every coin has two sides. To take advantage of these benefits, we are increasingly forced to leave our personal data with companies and institutions. Sensitive information that cybercriminals are all too eager to access. We hear the word ‘data breaches’ more and more often in the news. Think of the cyberattack on the KNVB, the Dutch Data Protection Authority concluding that everyone’s personal data is lying in the street, the severity of data breaches increasingly growing, and so on. When a company experiences a data breach, this can have serious consequences. For the company itself, but also for the consumer.
As a leading data processing company, EDM helps businesses increase their return on data. We breathe data and are therefore more aware than anyone of the risks that data processing entails. In a time when consumer privacy is central and technological developments follow each other at a rapid pace, it is extremely important to do everything possible to minimize the risks of a data breach as much as possible. From our perspective, we can offer some guidelines that reduce that risk. In this two-part series, we tell you more about data breaches, related to personal data. Part 1: what are they and what are the consequences, part 2: how to limit the risks of a data breach.
What is a Data Breach?
We speak of a data breach when unauthorized persons gain access to confidential or personal information. A data breach can occur when data is stolen, lost, sent incorrectly, or otherwise exposed to external or unauthorized persons. A data breach can be distinguished into 3 categories:
- Breach of confidentiality: when intentional or unauthorized disclosure or access to personal data has taken place.
- Breach of integrity: when intentional or unauthorized modifications to personal data have been made.
- Breach of availability: when personal data has been intentionally or unauthorizedly destroyed.
How Can a Data Breach Occur?
A data breach can have various causes, where intent is certainly not always involved. For example, the loss of an unencrypted USB stick with personal data or accidentally sending sensitive files to the wrong recipient. However, cybercriminals often use phishing and public networks to gain access to data. They often use fake emails or pose as public networks to gain access to account and personal data. Social engineering is another method where criminals try to exploit human weaknesses to gain access to systems.
Insufficient security and encryption of data also increases the risk of data breaches, as hackers can more easily gain access to personal data or infect servers with ransomware. Securely sending data is therefore not sufficient; it is important to also take adequate security measures to prevent data breaches. The absence of up-to-date security measures, such as firewalls, antivirus software, and regular software updates, can lead to vulnerabilities in systems. This opens the door for hackers to gain unauthorized access to personal data.
What should You Do if You Experience a Data Breach?
When a data breach has occurred, an organization or institution must close this breach as quickly as possible. Additionally, they must gain insight into how extensive the damage is in order to subsequently inform customers about the data breach. This way, customers know they must be extra alert and change login credentials. There is a reporting obligation for data breaches. This means that companies and governments must immediately report data breaches to the Dutch Data Protection Authority (AP). The Dutch Data Protection Authority is an independent supervisor in the Netherlands that is committed to monitoring personal data. If an organization does not report a data breach, there can be financial consequences.
What are the Consequences of a Data Breach?
The consequences of a data breach are often far-reaching and twofold, namely for an organization and for the consumer. It is therefore important to not only be aware of how a data breach can be prevented, but also what the consequences can be if a data breach occurs.
Organizations and Institutions
In case of a serious data breach, organizations and institutions are required to report this to the Dutch Data Protection Authority.
- Financial impact: Data breaches can have a major financial impact on an organization. In case of violation of the reporting obligation, the Dutch Data Protection Authority can impose a fine on the organization that can add up considerably. Concealing a data breach with high risk for all involved parties can also result in a fine. Not only fines, but also restoring the damage involves many costs. Think of detecting and solving the data breach, informing (affected) customers, and possible compensation payments.
- Business processes: In addition to the financial impact, a data breach can also have consequences for business processes. Services that are crucial for an organization can come to a standstill. Think of ransomware that blocks access to personal data, preventing customer service from processing customer requests, solving problems, or answering questions.
- Reputation damage: Finally, there is the chance of reputation damage. If your organization experiences a major data breach, the image takes a significant hit. Trust is seriously damaged, causing people to switch to competitors more quickly. Ultimately, this will also impact the financial consequences.
Consumers
For consumers, a data breach can also have far-reaching consequences. Identity fraud is a common problem, where criminals use personal data, for example, to assume someone else’s identity and make purchases without payment. Fraud, particularly through phishing, is another form of fraud that can lead to obtaining sensitive information. Moreover, data breaches can pose a threat to prominent individuals, such as politicians, where their safety may be compromised. It is therefore essential to take the consequences of data breaches seriously and take appropriate measures to protect consumers’ privacy and safety.
In part 2 you can read more about how you can limit the risks of a data breach and we provide several practical guidelines that you can start using immediately. If you want to know how EDM can make your organization future-proof, read more about our data & cloud expertise. Or contact us, and we’ll be happy to discuss this topic with you.