Average cost of a data breach for UK businesses 2023
The Risks of Data Breaches
Today’s digital age comes with a series of technological advancements alongside a growing number of opportunities for data breaches. Convenience and risk often go hand in hand. When sensitive data falls into the hands of hackers, it doesn't take long for systems to crumble, finances to dwindle, and reputations to shatter.
The risk of data breaches is undeniably ominous. Therefore, understanding the intricacies of data protection management has never been more critical.
What is a data breach?
Data breaches are caused by cyberattacks and security incidents that manipulate personal data or expose sensitive information for financial gain or personal attacks. Hackers often obtain confidential information through channels such as spam emails, fake websites, credit card data, trade secrets, and customer records.
To gain a deeper understanding of data protection, let's delve into the costs and consequences of data breaches in the following sections.
The cost of data breaches
Financial loss is the most evident consequence of a data breach. Regrettably, the cost of a data leak can cost millions of euros for a business. According to a report by IBM, the average cost of a data breach for UK businesses in 2023 stands at £3.4 million, a slight decrease from the previous year's £3.8 million. Notably, the highest fine imposed due to a GDPR violation was £22.05 million (British Airways), and this year TikTok faced a fine of £14.5 million.
An alarming correlation exists between the improper use of AI tools and the rising incidence of data breaches. Organisations lacking expertise in AI and essential automation tools are more vulnerable to data breaches.
The impact of data breaches on individuals and organisations
A data breach is deeply impactful with far-reaching consequences. Under the GDPR framework, organisations can face penalties of up to £17.5 million (UK) and €20 million (EU), or up to 4% of their annual global turnover, whichever is higher. Consequently, many businesses suffer financial losses; some even face bankruptcy due to substantial fines.
Operational downtime is another significant concern besides financial losses, with disruptions lasting days or weeks. However, the most severe blow often affects an organisation's reputation. Hard-earned trust can plummet swiftly, and long-term customers may readily switch allegiance to competitors.
The Role of Data Protection in Building Trust and Credibility
Building trust with customers can take considerable time, from days and months to even years. Therefore, instilling confidence in how you handle their data is crucial. Practical and up-to-date data protection measures can mitigate major security incidents, resulting in increased customer trust and better customer retention.
How data protection can build trust with customers
Customers seek transparency and security in addition to quality and convenience. No one appreciates a business that exploits personal data. People desire a seamless user experience without the fear of their private information being compromised. Your clients will appreciate it even more if they have complete control over their data.
For this reason, it plays a pivotal role, particularly in customer retention. The best way to address data protection concerns is by strengthening the cyber security infrastructure and providing clear and concise data privacy notices outlining key elements.
How data protection can boost your brand reputation
Competition is relentless, and maintaining a competitive edge is an ongoing challenge. One of the easiest and most effective ways to enhance your brand's reputation is by satisfying your customers. People value brands that uphold and safeguard their personal information.
Compliance with data privacy laws sets you apart from competitors, as customers value businesses that prioritise their personal information. Failure to establish efficient data security management can weaken your brand value irreversibly.
Product Director at e-Boks
"Security is a cornerstone in our digital postbox service, and is purpose-built for the secure exchange of confidential documents. Our system employs edge-to-edge encryption and integrates the most current security technologies and practices. This creates a trusted ecosystem, free from spam viruses and phishing attempts. Senders can trust that their documents will reach only the intended recipients, maintaining the integrity and confidentiality of every exchange."
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The Implications of Data Breaches
Understanding the importance of adhering to data protection best practices helps you avoid more severe issues such as legal consequences and ethical dilemmas. Let's explore why data protection is necessary.
Legal consequences of data breaches
Once customer data is compromised, it opens the door to legal battles beyond operational disruptions or reputational damage.
One key example is Yahoo, a tech giant that failed to secure its users' private data in 2013, resulting in 3 billion compromised accounts and $35 million in fines and 41 lawsuits.
Facebook, too, faced significant repercussions for the largest-ever fine levied by the US Federal Trade Commission, amounting to $5 billion.
Over the years, there’s been an increase in class action lawsuits stemming from customers whose data was leaked without their consent. With the rise in legal consequences, implementing the right data protection measures is now a necessity.
Ethical implications of data breaches
On the ethical front, data breaches have a profound impact on your relationship with customers. Once a data breach becomes public knowledge, your business may be perceived as untrustworthy due to:
- Lack of privacy
- Inappropriate data use
- Inaccessibility of data content
The Legal and Ethical Aspects of Data Protection
Data protection is a multifaceted domain that encompasses both legal and ethical elements. For that reason, businesses are expected to be well-versed in various data protection laws and principles.
Data protection laws and regulations
In the UK, the Data Protection Act 2018 addresses the legal aspects of data protection, supporting both individuals' right to control their personal information and organisations' lawful use of personal data.
The General Data Protection Regulation (GDPR) is a regulation in EU law on data protection and privacy in the European Union (EU) and the European Economic Area (EEA) which has been in effect since May 2018.
The United States however has several federal laws and statutory acts to comply with, such as the Health Insurance Portability and Accountability Act of 1996 (HIPAA), focusing on communication between individuals and covered entities like doctors and pharmacies. Other relevant data protection legislations include ISO 27001, PCI DSS, and the California Consumer Privacy Act (CCPA).
Essential elements of data protection
When crafting a data privacy and protection notice, there are crucial elements you should take into account. Since most notices are paperless, you need to be more wary with the implementation. Make sure that the document emphasises:
How CCM Service Providers Can Safeguard Consumer Data With e-Boks:
Data protection is a complex endeavour with specific procedures that only data experts can navigate. However, reliable Customer Communications Management (CCM) solutions like e-Boks enable service providers to streamline communication processes for clients more efficiently and securely.
Built-In Security & Fully Encrypted Platform
e-Boks' Digital Postbox platform is built upon state-of-the-art technologies with multi-layered security and end-to-end encryption, facilitating secure data sharing and communication. It also ensures GDPR compliance, shielding businesses from legal consequences and hefty fines.
Our CCM solution is customisable and designed to cater to your client's specific needs, providing robust support for data protection officers and security teams.
How e-Boks' solutions can help you build trust and credibility with customers
Becoming a partner of e-Boks allows you to expand your portfolio and enhance your reputation among your clients as a trusted CCM Service Provider. e-Boks is a renowned platform that is recognised by public organisations in the Nordic region. We also work closely with the governments of Denmark, Greenland, Ireland and Norway and as their national digital post provider.
With over 22 million users globally and more than two decades of experience in the digital infrastructure industry, e-Boks is committed to helping organisations bolster their credibility and improve efficiencies.
Safeguard Customer Data and Facilitate Secure communications with e-Boks
Protecting data across all communication channels is crucial to build customer trust and enhance your brand reputation. Given the complexity of data security, partnering with a leader in secure digital communication such as e-Boks can help you optimise communications and securely share information and data through a centralised platform.
Our innovative digital postbox solution is designed using advanced encryption features to safeguard confidential information and ensure compliance with data protection regulations. Contact us today to learn how we can help businesses enhance productivity while mitigating data security risks and safeguarding digital communication effectively.
- e-Boks has more than 20 years’ experience as a provider of digital infrastructure.
- We proudly provide the governments of Denmark, Norway, Greenland and Ireland with national digital post solutions
- Well renown international banks, insurance companies and energy service providers have preferred e-Boks as supplier and development partner instead of pursuing their own solutions.