The number of data breaches suffered by major organisations in recent years has been on a steady rise. That trend continued last week, as Dixons Carphone were on the receiving end of a serious compromise. 5.9 million bank cards were accessed, with the reaction proving unsurprisingly hostile. Almost instantly, the breach was headline news, causing concern and distress for many. However, such worry was almost certainly shared by Carphone themselves, as they braced themselves for an almighty backlash. That inevitably transpired. Shares in the company fell by more than 3%, on the same morning it announced the launch of an investigation into the matter. The consequences of suffering such a breach are severe for all businesses.
Damaging headlines in the press
When news filters through to the media about such a high profile breach, it becomes common knowledge very quickly. Once it does, the headlines cannot be reversed. Judgements are instantly made, and perceptions become difficult to alter from that point onwards. This is extremely damaging for a business, due to the importance placed on maintaining a positive reputation. A data breach will ensure any reputation built up over time is hit, and it can take a long time for such a standing to be restored.
Lose the trust of customers & suppliers
A consequence of such negative press is often a loss of customers. Once they see the headlines, their previous confidence in the business takes a hit. Especially in circumstances such as these, when customer information is potentially accessed. The same can be said of suppliers, who will be similarly concerned that data involving them has been compromised. If sufficient customers, or important suppliers, decide to move away from a business, significant losses and disruption are likely to be felt.
Executives can lose their jobs
Another potential repercussion of data breaches can be the loss of jobs. This will not always be the case, but in large organisations, where a lot of customer information is held, and the effects are more severe, those responsible can be punished for their shortcomings. Not only does this cause disruption to the running of the business, but it means more time and money must be spent on finding a replacement. Such outcomes may not always be necessary, but it does highlight the seriousness of the situation.