Today’s blog is written by guest blogger Mike Jeffery of Jeffery Associates. Jeffrey Associates provides independent insurance and financial protection advice to businesses and private individuals across the UK.
When I recently met the LendingCrowd Team, it occurred to me that some of the work I do in risk assessment might be highly useful for LendingCrowd’s audience. After all, what’s the point in raising funds to grow your business if you haven’t adequately protected your assets or put a disaster recovery plan in place? Keep reading to learn more about why you should defend your business against data loss, and how to secure your data.
Modern businesses trade on trust and customer data, but both can vanish overnight in the event of computer failure or cyber attack. Is your company doing enough to protect against this threat?
It’s one of those moments we all dread: your desktop computer suddenly makes an alarming noise and blacks out, never to turn on again. Or you turn to pick up your laptop bag in a busy café, only to find it’s been whisked away by a thief. As the reality dawns on you that your device and its data might be irretrievably lost, many of us would be asking: Why didn’t I secure my data?
According to The Guardian, 78% of all organisations have experienced a data breach in the last two years, and 60% of small and medium-sized businesses don’t routinely back up their data. It’s never been more important to take data security seriously.
An economy reliant on data
Today’s digital economy relies on vast flows of data racing across the globe and through cables under the oceans. We all send emails, photos and social media updates. Organisations collect sensitive data about almost every element of our lives, from our car insurance to our taste in shoes to our medical conditions.
We expect all this information to be stored securely. If companies fail in their duty to protect data, accusations, lawsuits and even prosecutions may follow from customers, shareholders, business partners and regulators. Data loss is a major risk to a business’ reputation and profitability; a study by Diffusion Group found that 72% of companies cease trading within two years of a major data loss.
How data can be lost
There are two aspects of data loss. It can either be lost in the sense of being no longer accessible – for example, on a corrupted hard drive or server destroyed by fire. Data can also be overwritten through human error – for example, by saving the wrong version of a document, or lost by a system malfunction.
Data can also be lost through outside agents stealing it, whether they leave behind a copy or not. This can happen through malware which steals details such as credit card information, ransomware which permanently encrypts data unless a business pays for decryption, or simply by a device such as a laptop being stolen.
The consequences of deleting data
Data is a valuable asset and losing it can cause major embarrassment. For example, if you offer a hosting service for customer photos and you delete some files, you are likely to face considerable anger at all those lost memories. If the data is for internal use, such as billing information, you might be in the awkward position of not being sure which clients need to be invoiced.
With today’s big data approach to sales and marketing, information is a hugely valuable commodity and the loss of it can compromise your ability to develop as a business, even if it doesn’t impact on your customers.
The consequences of a data leak
As the recent TalkTalk experience shows, detecting a data leak can be excruciating for a business. In the case of TalkTalk, the head of the company told customers their data, including financial details, may have been leaked and it may not have been encrypted. It’s hard to imagine a worse scenario for a brand’s trustworthiness. Many data breaches also require a company to self-report to the Information Commissioner’s Office (ICO).
Cyberattacks can not only target financial data, they can also steal highly confidential information. The recent Ashley Madison fiasco, in which a dating website for people seeking to have extramarital affairs was hacked, is an example of how the release of sensitive data can have life-changing consequences.
How to secure your data
Every business is different, so you may need to consult an expert to identify your full risk profile. However, the following steps are likely to help:
- Install antivirus/malware protection and firewalls – and keep them updated
- Don’t forget to install protection on laptops, mobiles and tablets too
- Add password protection, and change passwords every 2-3 months
- Develop a data protection policy and train staff in best practice
- Use secure documents with digital signatures and password protection
- Think about paper too – don’t overlook printers and hard files
Are you doing enough to protect your business’s data? If not, consider how much of a risk is data loss to your prospects – the answer might surprise you. By protecting your business’s data, you’re protecting its future.