InformationalMarch 29, 20236 Ways Data Breaches Can Strike Your Brand Value


Data breaches have become a significant concern for organizations across industries worldwide. With more sensitive data stored and transmitted online, these security breaches have far-reaching consequences. Cyber attackers are constantly devising alternative ways to breach security protocols. As a result, it becomes crucial for companies to stay at the forefront of technology and security measures. The cost of remediation after a data breach can be high or unpredictable, and often, there is a price to pay beyond just financial losses. Consequently, businesses must prioritize security measures and invest in robust technologies to prevent security breaches and protect sensitive data.

What is a Data Breach?

A data breach occurs when confidential information is accessed and exposed to an unauthorized environment, intentionally or accidentally. Such a breach violates an organization’s or individual’s security protocols, enabling unauthorized persons to copy, transmit, view, or steal private data.

The theft or loss of personal, financial, medical, identification, trade secrets, contact, or intellectual information constitutes data breaches, which are increasingly common due to technological advancements and the abundance of digital data. 

Cybercriminals or hackers typically execute data breaches for the following purposes:

  • Financial
  • Political, 
  • Terrorist, or 
  • Espionage 

Data Breach

Why do Brand Value and Cyber Security Go Hand-in-Hand?

In the competitive business world, a brand’s reputation is crucial in distinguishing itself from its rivals. Trust, built through transparency in cyber security, plays a vital role in developing a brand reputation. Business owners must recognize the link between reputation and cyber security to establish a positive brand image.

With Cyber threats looming over our heads, your brand reputation heavily relies on your capacity to cope in these uncertain times. In other words, it’s about managing cyber crises and protecting your business to maintain a positive brand image.

Let’s now discuss how a data breach can compromise a brand’s reputation: 

1) Incur Unforeseen Costs to Business

Experiencing a security breach can result in significant expenses for companies. These costs may arise due to various factors, such as:

  • outsourcing cybersecurity technology and expertise, 
  • notifying affected parties of the breach, insurance premiums, and 
  • support from public relations. 

For instance, ransomware can impose a significant financial burden on businesses as it can prevent employees from accessing IT systems unless the company pays off a hacker. Additionally, companies may need to hire lawyers and other experts to ensure compliance with cybersecurity regulations. In case of an attack, they may also have to bear attorney fees and damages resulting from civil claims against the company.

2) Distorted Operations

Besides direct financial losses, cyberattacks can also result in indirect company costs. For instance, they may suffer a significant disruption to their operations, which can flag a revenue hit. Cybercriminals have a range of techniques to paralyze a company’s everyday activities, such as infecting computer systems with malware that erases valuable information or installing malicious code on a server that blocks access to the website. Hacktivists often disrupt business operations to call out perceived wrongs or promote transparency. 

According to a report published by Identity Theft Resource Center, In 2022, 1,774 organizational data compromises impacted over 392 million individual victims globally. They compromised legally protected information identifying individuals accessing various services from financial and healthcare to social services.

3) Lost Revenue

A cyberattack can cause a sudden drop in revenue for businesses as customers become cautious and move to protect themselves against cybercrime. Hackers can also extort money from companies. In 2014, Sony Pictures was attacked before the release of “The Interview,” resulting in a loss of $30 million. Studies show that 29% of businesses that suffer a data breach lose revenue, with 38% losing 20% or more. Any IT system downtime can lead to work disruptions, and a non-functional website can drive potential customers to explore other options.

4) Stolen Intellectual Property

In today’s business world, a company’s valuable assets often include its product designs, technologies, and go-to-market strategies. In fact, as per intellectual property advisory firm Ocean Tomo, intangible assets accounted for a significant 87% of the value of S&P 500 companies in 2015. However, the increasing reliance on cloud storage has made this intellectual property vulnerable to cyber threats. Shockingly, around 30% of American companies have reported incidents of their intellectual property being stolen in the last decade. Therefore, businesses must safeguard their intellectual property from potential cyber-attacks.

5) Modified Business Processes

Cybercrime can harm businesses in more ways than just financially. Companies must rethink how they gather and store data to protect sensitive information from being vulnerable. Many companies have stopped storing personal and financial details such as credit card numbers, social security numbers, and birthdates to reduce the risks. Some businesses have even shut down their online stores due to fears of cyberattacks. Customers now want to know how companies handle security concerns and prefer businesses that are transparent about the measures they take to safeguard their data.

Data breaches also directly impact the economy as their cost continues to rise over 20% year-on-year, amounting to 4-6% of the global gross domestic product.

6) Damage to Reputation

Data security is crucial in today’s digital age, and any breach can damage a company’s brand equity and result in notable reputational damage for organizations. 

One recent example of this is the Colonial Pipeline Ransomware Attack that occurred in May 2021. Colonial Pipeline is a significant fuel pipeline operator in the United States. The attack resulted in the shutdown of its pipeline system, which caused a substantial disruption in fuel supply across the East Coast. The attackers could infiltrate Colonial Pipeline’s systems through a compromised password and then encrypt the company’s files, demanding a ransom payment for the decryption key.

The incident received widespread media attention and resulted in significant reputational damage to Colonial Pipeline. The company faced criticism for its lack of preparedness for such an attack and its handling of the situation, including its decision to pay the ransom.

In addition to the reputational damage, the incident had significant financial implications for the company, with the ransom payment estimated at around $4.4 million. The incident also resulted in increased scrutiny of the cybersecurity practices of other critical infrastructure operators and highlighted the need for increased investment in cybersecurity measures.


So, we discussed factors contributing to security infringements. Overall, security breaches can be costly to remedy and potentially ruin the reputation of prominent organizations, causing harm to individuals and necessitating investigation costs, redress, victim compensation, fines, etc. In our upcoming, we will discuss Data Breaches in more detail.

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by Jyoshita

Content Writer | Redfox Security