Security Awareness Programs Could Save Your Business

A security awareness program could save your business from the substantial financial costs associated with security breaches

. These costs can be so high that many businesses would be forced to close. According to the Poneman Institute, as published on the website Native Intelligence, Inc., security breaches costing $4.7 million were levied against companies in 2006. Study findings confirm the fact that employees are the biggest cause of security problems. Legal compliance and common sense dictate implementing these awareness programs to protect business assets and prevent fines, lawsuits, jail time and damage to the company's reputation and stock losses.

Security Appliance as a Legal Obligation

Implementing a security awareness program is the law. For companies that choose to ignore this legal responsibility, they can be subject to heavy fines and penalties, including jail time. Consequences vary depending on the severity of the security breach and circumstances. Federal regulators are charged with the responsibility for policing security requirements. High-profile security breaches are common. The numbers speak for themselves. According to a 2010 Symantec survey, 75 % of small and medium-sized businesses reported that they were the victim of cyber crime in the past year. Estimated average costs associated with these attacks were $188,242 per incident.

Brand and Reputation Damage

One cost that can do as much damage to a corporation's financial health as federal fines and penalties is the staggering drop in stock prices often associated with a high-profile security breach. With growing concerns about identity theft and the public's heightened awareness about the problem, brand damage can be severe for companies implicated in a security scandal. Stock prices often take a dive when the public perceives that a company is being reckless with customer information.

Sources:

1. http://www.nativeintelligence.com/ni-programs/whyaware.asp

2. http://www.nativeintelligence.com/ni-articles/article-elc-3-07.asp

3. http://smallbiztechnology.com/archive/2011/09/tech-thursday-sept-8-cost-of-security-breaches-pipejump-updater-online-platform-blackberry-management-center-intuit-small-business-employment-index.html/

Along with a drop in stock prices, a compromised reputation usually means a drop in revenues and a loss in productivity related to necessary system changes to achieve improved security. Opportunity costs must also be factored in as a soft cost associated with lost business from current and future customers as the direct result of reputation damage. Additionally, advertising and public relations campaign costs incurred for damage control purposes increase expenses even further.

Lawsuits

Legal costs can cripple a company. The lawsuits that result from a security breach often come from multiple plaintiffs. Even in the rare case that a company is not ordered to pay damages to a plaintiff, the legal costs associated with presenting a defense in court is substantial.

Conclusion

Most companies cannot afford to ignore security awareness programs without putting the company's well being at stake. For many companies, a serious security breach has the potential to bankrupt the business. Prudent company executives recognize this fact and view security awareness programs as a necessary risk management tool.

by: Peter Wendt

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