To see the negative financial impacts of a breach of sensitive customer data, look no further than Target Corp., where a holiday-season data breach of up to 110 million credit and debit card accounts cost the company $61 million to manage in the fourth quarter of 2013, and will almost certainly keep costing for months to come. Target was also hit with other expenses likely tied to the breach, but less directly. For example, net income dropped 46 percent in the last quarter of 2013, compared with the same quarter in 2012.
A new report, “Avoidable Collateral Damage from Corporate Data Breaches: Assessing the Effects of Data Breach Remediation on Financial Institutions, Healthcare Providers and Merchants” [PDF], supports the idea that becoming the next Target can be toxic for companies, particularly those in the finance, health-care and retail sectors, which usually collect and store customers’ personally identifiable information (PII). The study, commissioned by sensitive data management solution provider Identity Finder, with research by Javelin Strategy & Research, also finds that many companies are offering identity protection services (IDPS) to customers in the wake of breaches, but that these might not be terribly effective tools.
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