Reputation matters. We’ve all heard the Warren Buffett quote a millions times, “It takes 20 years to build a reputation and five minutes to ruin it.”
And nothing can ruin a reputation faster than a cyber attack. Hackers gaining customer information makes big headlines, as Sony and Target found out. While those were two very big, high-profile cases, cyber attacks are increasing in number and impact.
More important, analysis of recent cyber attacks clearly shows these attacks can have a material impact on brand reputations and business operations. For example, a KPMG survey indicated a cybersecurity event would cause 58% of customers and 86% of procurement departments to reconsider doing business with an affected company. And a study by the Ponemon Institute shows that data breaches can cause a 21% decline in the value of a company’s reputation and brand.
Be Prepared for Cyber Attacks
Despite these potential risks, several surveys indicate business owners and executives do not perceive cybersecurity events as a major threat to their brand’s reputation. For large companies, this may be true. Target, Home Depot, Sony, and Ebay have all recovered from the negative impacts of cyber attacks, and they were certainly never at risk of going out of business. Even though these companies did not shut their doors they did have unexpected expenses on added marketing and security procedures to redeem their brand image. However, small and medium-sized businesses do not have the financial resources or diverse revenue streams that help mitigate the effects of major damage to their reputation. For a smaller business, a cyber attack could be fatal.
Don’t wait until it’s too late. Now is the time to develop a reputation risk management strategy. That’s where Threat Sketch can help.
The Threat Sketch Risk Assessment Provides Tools for Being Prepared
Managing your company’s reputation begins long before a crisis event. Companies must be proactive in identifying and mitigating potential cybersecurity threats. The Threat Sketch Risk Assessment tool helps companies on both fronts, by identifying potential cyber threats to your business and helping you mitigate the risk of future attacks. We also identify the potential loss to your business from a cyber attack, which helps you budget IT expenses and prioritize the efforts of your IT staff.
Equally important to security measures is how a company responds to a cyber event. This means having a formal strategy for business continuity and IT security management in the event of an attack. A formal response plan should involve all aspects of your business, from operations and IT departments to insurance and legal resources. Cybersecurity insurance policies are one avenue for mitigating the costs associated with a cyber attack. Many carriers now offer policies that help offset the marketing costs associated with restoring brand reputation and customer loyalty, as well as lost revenues and additional costs of upgrading your IT systems.
It is easy to think cyber attacks only happen to other companies, that something like that couldn’t happen to your business. But the reality is, it could. Make sure your company is protected. Sign up for a Threat Sketch cyber risk assessment today.
About the Author Nathan Powell: Nathan, co-founder and chief risk officer for Threat Sketch, enjoys the research and detective work involved in helping companies find hidden and under-appreciated risks.