Understanding the impact of business data breaches and crafting a recovery plan

As a customer, your credit card issuer or bank may offer liability protection, so you may not be held personally responsible for financial damages.

As a merchant, the fallout from a business data breach can be crippling, once you factor in the possibilities of:

Diminished consumer confidence in your company
Out-of-pocket financial losses
Litigation, legal expenses, and punitive damages

Yet, how do data breaches even happen? What steps can you take to help protect yourself? Is it possible to recover once a breach occurs?

How data breaches happen

Data breaches happen quite frequently given how interconnected our world is today. In fact, ransomware is classified as the most disruptive form of breach facing Canadian businesses today. Every computer, cellular device, networked system, and unsecured Wi-Fi connection represents a potential point of entry for a would-be thief. The problem will only continue — especially as we migrate more of our personal and financial lives online.

Unfortunately, some small businesses can be unaware of how vulnerable they really are. Some companies do understand the landscape but may not have the resources or the technology required to help prevent the criminals from infiltrating their systems.

Best practices to help prevent a data breach

Here are some steps you can take to help reduce the risk of a data breach, including:

Using strong passwords for all of your devices
Changing those passwords often
Installing all the latest updates and patches for your devices
Using a trusted anti-virus software program

However, we also recommend shoring up your payment environment — since financial data is what thieves are after most often.

Some of the more effective approaches include:

Equipping your website with an SSL certificate
Using a PCI-compliant payment processor
Implementing two-factor authentication and fraud management tools

However, no preventative measures can ensure 100 percent protection. They can only help make your business’s data more difficult to access.

What should you do if you become a data breach victim?

How to recover from a data breach

Some companies may not announce that their systems were breached — or they delay sharing details in a timely manner.

This lack of transparency only makes the problem worse. All affected parties will learn about the data breach eventually. What’s more, by not alerting the victims as soon as possible, you’re giving criminals more time to do more damage.

One of the most important steps involves alerting everyone as soon as possible, including customers, payment processors, banks, employees, vendors, and the authorities.

The next step involves taking your systems offline, changing all passwords, and restricting employee access on a need-to-know basis. It may already be too late to stop some of the damage, but there’s no reason to leave potential vulnerabilities exposed.

Thereafter, you’ll want to bring in a security expert to help measure the full extent of the damage. This process involves conducting detailed sweeps of all affected devices, systems, and networks. True recovery can’t begin until any latent malware has been identified and removed — and finally, you can start rebuilding.

This is a slow process that involves educating employees, customers, and vendors about what happened — and why. You also need a plan of attack to help ensure that no such data breaches ever happen again in the future.

The recovery process isn’t a pleasant experience, which is why we recommend investing the requisite time and effort to help prevent and minimize the risk of data breaches.

How can we help?

If you want to learn more about how Clover can help you accept payments, run your business and sell more, please contact your Clover Business Consultant. You can also follow us on Facebook and Instagram.

This information is intended solely for informational purposes and should not be interpreted as legal or financial advice. Readers are strongly advised to consult with their attorneys or security professionals to obtain guidance tailored to their specific circumstances.