Calculating the financial cost of a data breach is tricky, but two recent studies shed some light on the subject from a banking perspective.
Reported on by American Banker online, the Kaspersky Lab B2B international survey of more than 3,900 financial and other companies worldwide revealed that lost financial data costs ranged from $66,000 to $938,000 per organization, depending on the size of the company. Included in those costs were the services of consultants and lawyers to help manage the problem, lost business opportunities and investment in services and solutions like extra security training to prevent subsequent incidents.
Additionally, the study found that 47 percent of financial companies identified damage to their reputation and loss of credibility as the worst consequences to the company following a data breach. Specifically, the Kaspersky Lab reports that 43 percent of businesses changed banks following fraud on their account, and 82 percent said they would consider leaving an institution that suffered a breach.
The second survey cited in the American Banker article was conducted by the American Bankers Association among its members this past spring to assess how they were affected by the Target data breach. It found that the average loss per fraudulently used debit card was $331; that figure rose to $530 for credit cards. In addition to the costs of reissuing cards, survey participants cited expenses for inbound and outbound phone calls, staff time spent on implementing heightened fraud strategies, fraud monitoring, claims processing, and responding to customer inquiries.
The financial and reputational fallout following a data breach can be similar for businesses. The stakes are too high to leave data breach security to chance. That’s why TransFirst® offers its merchant account holders a unique program specifically designed to help them meet the expenses resulting from a suspected or actual breach of payment card data.
The Data Breach Security Program helps meet expenses from a breach — including industry fines and assessments — in the event of an unintended breach of confidential customer information, regardless of how it happens. It offers a forensic audit as required by the Payment Card Industry Data Security Standard (PCI DSS) whenever a data breach is suspected to confirm whether a breach has actually occurred and to pinpoint vulnerabilities in the system. Issuer-related expenses that cover card replacements costs, credit monitoring and other expenses related to a breach are also included.
TransFirst also encourages strict adherence to PCI DSS as the first line of defense merchants have to protect themselves, their businesses and their customers from data breaches. PCI compliance focuses on security for the storage, transmission and processing of cardholder data.
When it comes to the threat of data breach, the best defense is a good offense. Familiarize yourself with steps you can take to recognize and prevent fraud to protect your livelihood and your customers.