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Reputational risk is a top concern for cybersecurity. When a brand loses customer loyalty, they risk the demise of the business. Some companies take years to recover from the reputational damage due to a data breach.
What is Cyber Reputational Risk?
Reputational Risk is any risk your company takes that can damage brand loyalty resulting in loss of sales. While that sometimes includes customer service failures and environmental impact, enterprises lose customers when they lose customer data. In an effort to regain trust, companies spend millions of dollars to put in new security measures, revisit marketing campaigns, and hire new executives.
How companies put their reputation at risk
When it comes to cybersecurity, lack of security around payment portals is the most significant risk but compromising login details is a close second. Many users and consumers use the same password for all their platforms, so a breach on one means all are at risk.
As large corporations protect their owned and managed assets closely, the risk still exists in the third-, fourth-, and Nth-party vendors in their cyber supply chain. These smaller businesses rarely have the same security protocols in place but may store or have access to your data.
Impact of a Breach on Your Reputation
The easiest example of a data breach impacting reputation is the Target data breach in 2013. Sales plummeted after the exposure of 40 million credit and debit cards due to a third-party vendor hack. Target laid off thousands of corporate and retail employees and has only recently regained some credibility.
Another study showed stock prices dip an average of five percent following the disclosure of a breach. However, the stock regained value within seven days if the company self-reported the breach and already had a strong security standing. Those surveyed believe the top impact of a data breach is the loss of brand reputation.
When companies lose their customer loyalty, they also risk the loss of potential customers as those unhappy former customers share their experience.
Decreasing your reputational Risk
Since risk is always going to be part of operating a business, you can take a few simple steps to decrease your risk and, specifically, protect your brand reputation from cyber attackers.
With an overview of your online ecosystem through Cyberpion, you’ll see every asset connected to your online presence – from forgotten web pages to website scripts. When server details change or a vendor switches platforms, you’ll be alerted if the change creates new vulnerabilities for your organization.
With a prioritization of risks in hand, your security team can get to work remediating vulnerabilities before they become breaches.
While the breach and loss of customer data do the most damage to a company’s reputation, the time it takes for them to announce a breach has a massive impact on their reputation, as well.
The earlier you inform users about a breach, the better. Your team may still be resolving the problem, but your users and customers will appreciate the early knowledge. Part of the damage to Target’s reputation was that they waited 20 days after discovering the breach, after the busy holiday season, to announce the full extent of the breach, which lost even more trust from their customers.
After a breach, many enterprises lay off their security executives to signal a change in protocol and commitment to safety. If it’s your job on the line, you should be more cautious than ever.
Train employees to spot phishing emails. Have policies and portals in place, so everyone in the team knows their IT department will never ask for their login over email.
Prevention is the best management plan, but you always need to have a communications plan in place to demonstrate how you value your customers’ data even during a breach.
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