– why do data breaches cost millions of dollars?
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Having a data breach sets off a string of events that immediately has financial impacts.
Data and security teams go into overdrive and forensic investigations are granted all the resources at a company’s disposal. Storage, hardware, and software licenses for those forensics are very expensive. Security goes a little crazy locking things down as a response, which essentially slows down productivity for the entire company.
Operations teams are grilled and will be part of that forensics investigation and they’ll likely take the brunt of the penalties if they can’t prove they did everything they could to mitigate the breach. All policies and procedures are looked at with a microscope by auditors (usually hired from outside).
Legal teams are also set on alert and are meeting up with regulators, auditors, and internal teams to identify the repercussions and discuss mitigation and penalties.
Customer service is on alert and extra resources are allocated on training and how to inform customers who might contact them of the breach. Just about EVERYTHING is now recorded (if it wasn’t previously) and will be open for discovery for upcoming lawsuits.
The entire company will be re-trained on security best practices, regardless of where the breach occurred.
Directors and executives will be discussing internally how to downplay the situation with very carefully worded memos and missives People (sometimes even those responsible) will be thrown under the bus and there will be plenty of blame to go around.
Bottom line is that once people start paying close attention to all the details, tons of money is spent investigating what went down, how to prevent it in the future, and settling lawsuits that rise out of it.
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