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How Data Breach Affects Business Revenue and Reputation

Discover how data breach affects business revenue and reputation, and how Isecurdata could help you to reduce the risks of data breach to produce sustainable security resilience.


Centrify reported that companies experienced an average stock price decline of 5% immediately following the disclosure of their data breach. 2021 Cost of Data Breach by IBM shows that 2021 had the highest average cost in the 17-year history of the report, thus, the costly effect of a data breach on organisations. Hence, this article explains in detail how data breach affects the revenue and reputation of a business.

Many reports have shown how costly data breaches can be to businesses and the grievous effect of past data breaches in history. Businesses must become proactive with handling consumers’ data and other sensitive information they run.

Furthermore, businesses should protect their consumers’ data from unauthorized access, modification and use. To subscribe to various services, consumers disclose their confidential data with the hope that the organisation will protect their personal information but unfortunately, many a time, that’s not the case.

Cybercriminals continue to find new ways to avoid defences to gain access to sensitive and valuable business data some of which are through sophisticated social engineering techniques, malware or supply chain attacks and trying every available and possible tactic to infiltrate, exfiltrate and profit from this sensitive data.

Most data breaches are commonly attributed to the following:

  • Malware Attacks or Hacking
  • Loss or Theft
  • Insider Leak
  • Unintended Disclosure
  • Payment Card Fraud

The consequences and the recovering process from these attacks cost businesses huge fortunes both financial and reputational.

Consumer Trust is Dented

Many consumers who have sustained a level of confidence in the credibility of a business to protect their sensitive data and personal information would have their trust damaged when a data breach occurs. This alone can have a declining effect on a business’s stock price.

When consumers can no longer entrust a business with their data and valuable information, consumers withdraw to seek for more secured businesses to transact with, which in turn will decline business profits and result in a great financial loss.

Reputation is at Stake

Time Critchley, CEO of Semafone said “…the reputational damage suffered companies who fail to protect personal data can translate directly into loss of business”. When the aftermath of a data breach is not managed properly, the business can be directly lost.

According to a Forbes Insight Report, 46% of organisations has suffered reputational damage as a result of data breach and 19% of organisations suffered reputationally and brand damage as a result of a third-party security breach.

A data breach is like a stigma, professing a business to be less secure, less effective and less efficient. If this lingers for a long time with no proper adjustment and strategic approaches, such business will be kicked out of the market. The response of an organisation post data breach can make or break their reputation.

Other Financial Costs of Data Breach

  • Additional Security: Post data breach, the company would incur an overhead cost of implementing additional security mechanisms and resources such as security vendors, consultation, PenTesters, and lawyers.
  • Litigation: The cost of a lawsuit is huge and it can be overwhelming to small and medium businesses. The business would have to bear the cost that comes with a lawsuit which can be very devastating.
  • Fines by Protection Authorizes: For instance, organisations in breach of GDRP can be fined up to 5% of annual global turnover. This is a huge cost that can shut down a business.

Isecurdata is specialised in IT managed services and optimal cybersecurity solutions. With over thirty years of IT Security experience, we can help you to reduce the risk of data breaches and produce sustainable security resilience.

Secure your business – book a consultation call with one of our cybersecurity specialists today.