Data breaches have far-reaching consequences

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Data breaches are a worrying prospect for any company. Should one occur, customers’ personal information could potentially be shared to the world, resulting in a large fine and even prosecution.

However, many firms may not have considered the fact that it could put other businesses off working with them too.

The second annual pan-European Information Risk Maturity Index, compiled by PricewaterhouseCoopers (PwC) and Iron Mountain, found that companies are experiencing up to 50 per cent more data breaches each year as a result of more information being online and hackers getting more sophisticated.

However, more than 60 per cent of organisations polled admitted that they thought it was more important to cut costs at present than to ensure that the information they hold is safe and secure.

Although 68 per cent of respondents agreed in theory that it is vital to have a responsible attitude towards data, 47 per cent said that in practice, their board does not see data protection as a big issue. This is a dangerous mindset and could lead to an even more laissez-faire attitude.

In addition, 58 per cent of the medium-sized enterprises in Europe polled said that they would refuse to work with a firm that had suffered a data breach. This could mean that some companies are significantly narrowing their horizons – and may eventually find it hard to organise new deals or work with suppliers.

PwC risk assurance partner Claire Reid warned: “Too many European companies continue to undervalue their information assets and overestimate their ability to protect them. This is no longer a lack of awareness; it’s a lack of action.”

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