A cybersecurity breach may occur in the digital realm. But its aftermath is more tangible seen in the hearts, minds, and actions of real live people. A breach will shake your customers’ confidence in your brand, with some abandoning ship and moving their business to one of your competitors. And make no mistake: it will cost you money, too. Recent studies have revealed that 29% of businesses affected by cyber breaches lose revenue and that 38% of those businesses suffer losses of 20% or more.
A data breach can get you in legal hot water, too. The federal government sets standards of cyber protection for any entity that collects customers’ personal data. Businesses that don’t comply with regulations routinely face fines and penalties. A company that is negligent in protecting customer data may whether even steeper costs. That’s a scary thought since the lion’s share of data breaches are caused by employee negligence, whether witting or unwitting. It’s incumbent upon business leaders to make sure employees are well-educated on cybersecurity best practices and incentivized to practice them.
Do Employees Take Cybersecurity Seriously?
It’s funny. When it comes to protecting themselves, employees actively take steps to avoid the risks of cybercrime. They’ve learned to use secure Wi-Fi connections and purchased VPNs to make sure they don’t have to use public networks. They invest in identity theft protection products. The estimated value of the VPN market is over $44 billion and, over the next several years, the identity theft protection market is expected to be worth over $27 billion. One reason these markets have grown is that their products have become more and more affordable. Consumers may pay under $50 per year for ID theft protection, for example. VPN service might set them back just a few dollars a month.
The instinctive will to survive is strong and motivates us to take all kinds of steps to protect ourselves, from locking our doors at night to taking vitamin supplements. The challenge for employers is to inspire employees to feel as protective of their businesses as they are of their own physical and financial well-being. And that’s just one of many complicated task business leaders face when trying to protect their companies against cyber threats.
Identity Management: Business Equivalent of Identity Theft Protection
It’s a lot easier to look at one’s self than it is to look after all of the selves that make up a business. You may have millions of customers and you have both legal and moral obligations to protect every one of them. Then there are your employees, each of whom has the potential to act responsibly to ensure your business’s cyber security or not. At the employee level, identity theft protection is known as identity management.
Proper identity management ensures that only bona fide employees can access your data systems and that employees only have access to the data they actually need to do their jobs. As your business changes and employees move through your organization, your company may begin to suffer from “access creep” data privileges that don’t align with employees’ current responsibilities. That’s one role identity management tools play: they automate data access and protect against the dangers of access creep.
Why is Identity Management So Important?
It’s no exaggeration to say that a successful identity management strategy can save your business from ruin. A Ponemon Institute study from 2020 revealed that the average data breach cost companies an average of $3.86 million. Today, businesses pay, on average $4.2 million per breach. Next year, unfortunately, the amount lost per data breach is expected to climb. The larger your business, the more you can expect to lose. Between lost revenue, fines, and customer lawsuits. But for as much value as a robust identity management strategy brings to a business, companies typically don’t give identity management its due.
Too Many Companies Skimp on Cybersecurity
According to Deloitte, one of the most respected risk analysis firms worldwide, the average business spends about 10.9% of its total IT budget on cybersecurity. Not 10.9% of its total budget just that segment of its IT budget. The majority of IT spending goes toward employee computers, network infrastructure, software licenses, and consulting services. When all is said and done, the average organization spends about 0.48% of its annual revenue on cybersecurity. Most cybersecurity experts consider that a dangerously small drop in the bucket when compared to the direct costs typically associated with even a single data breach.
What Are the Indirect Costs of Cyber Breaches?
It’s difficult to quantify the indirect costs of cyber breaches. But we do know that trust is the backbone of customer relationships and has a direct impact on brand loyalty and revenue. A 2021 study by Edelman found that 61% of customers will become brand advocates for brands they trust. Some 57% of customers report that they will buy new products and even pay a premium for them when the products come from a brand they trust.
Trust isn’t something you want to gamble on. Lost trust has a way of migrating to customers who’ve never even purchased from you. Consumers routinely read multiple product reviews before they purchase a product and are likely to shy away from brands whose existing customers rate them poorly. Many companies wind up spending millions to win back customer trust, using product discounts to entice them to purchase. Some may go through the trouble of rebranding entirely. Sadly, these are unnecessary expenses that the right identity management strategy might have eliminated.
Best Identity Management Practices
Cyberthieves attack your company by exploiting your employees. The majority of breaches can be connected to a single employee who unwittingly gave away the keys to the kingdom. That’s why your cybersecurity strategy should focus on education first. Training should begin the first day a new employee is onboarded and continue throughout his or her tenure. Refresher courses for long-term employees are also essential. Fortunately, training is one of the least expensive ways to improve cybersecurity across your organization.
It’s one thing to set out the rules and another thing entirely to enforce them. Your cybersecurity strategy should provide failsafe measures in the event that an employee should decide to flout the rules. And your enforcement policies should be quite strict. Employees who can’t or won’t follow rules should not be welcome in your organization. You wouldn’t tolerate employees who ignore rules about keeping doors locked or sexual harassment. The same should hold true in the case of cybersecurity rules.
Organizations that are serious about protecting their customers and themselves employ these cybersecurity practices:
- They don’t collect unnecessary information from their customers. Collect what you need to know to deliver a great customer experience and nothing more.
- They provide their employees with access to data on a need-to-know basis. Limit the data any individual employee has access to that information they must have to perform their duties.
- They routinely assess whether employees have access to only the data they need to do their jobs. If an employee’s job changes, changes are that the data that’s critical to job performance will change, too.
- They make sure that before an employee is dismissed or leaves the company voluntarily, their data privileges are revoked before they walk out the door.
- They use password management tools that make it easy (and mandatory) for employees to practice excellent password hygiene.
- They apply the same high standards across their data stacks. Any application you consider integrating into your business systems should include the highest cybersecurity standards. There should be no weak links in your systems.
Take a Holistic View of Cybersecurity
Remember that running your business involves many disconnected steps, from managing orders to managing your CRM system. Each step is vulnerable to security risks. Building customer trust is a slow process. Only by repeatedly providing secure customer interactions can you build a loyal customer base the holy grail of sales and marketing. So make sure every customer touch point is protected by equally robust cybersecurity standards, including gold-standard encryption and multi-factor authentication. Installing malware and virus protection on all employees’ personal computers is also essential.
While large enterprises often have the resources to implement powerful cybersecurity measures internally, smaller companies typically don’t have that luxury. So they make use of third-party identity management applications. From Microsoft to Google to OneLogin, there’s a wide range of choices for outsourcing identity management.