Cyber Risk No. 2: Loss of Reputation

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Reputation is a business’s most valuable asset. It is what keeps the customers we have and gives us new opportunities in the marketplace. Any negative event can damage that reputation, putting a business temporarily on the sidelines or even eject them from the game. 
Since whistle blower Edward Snowden revealed the NSA had overstepped boundaries in collecting metadata on millions of Americans, companies like Microsoft, Google and Facebook have been questioned about their involvement.  According to The Guardian (June 2013), the “world’s largest Internet brands claimed to be part of the information-sharing program since its introduction in 2007.” This includes Skype, YouTube, AOL and Apple.  It leaves us to question how this information is being used, whether is it for government surveillance or part of their business model, but the exposure of this secret and suggested misuse of data and betrayal of trust may damage the public opinion of these giants.   
These mega companies, however, can easily recover from suspicion and character damage. Their brands are a household name and the luxury of being a giant is that you are hard to topple. But what about smaller companies and their ability to recover from an unintentional data breach? Most companies collect information on their customers for no other purpose than to run their business and develop products and services. What happens when that private information involuntarily becomes public as a result of a malicious attack, whether via a former employee or malicious software controlling entities?
InformationWeek stated, while commenting on the Ponemon Institute study on the Cost of a Data Breach, “Customers, it seems, lose faith in organizations that can’t keep data safe, and take their business elsewhere.” Negative press and public mistrust are the natural consequences for loss of data, exposure to data misuse, or poor data security. These consequences are far more detrimental to the little guy. One in five small businesses falls victim to cybercrime each year and 60 percent of them go out of business within six months after the attack (National Cyber Security Alliance).
That’s why protecting your business from cyber risks — especially those placing your customers in jeopardy — will be one of the most important business moves you make.  

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