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Volume 32, Issue 2

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Friday, 03 May 2019 17:01

Investment in Cybersecurity is Key to Minimizing Risk and Gaining a Competitive Edge

With GDPR and the California Consumer Privacy Act dominating the data privacy conversation, Baker Tilly’s David Ross discusses the myriad benefits of maintaining compliance.

Recently, we saw Google fined $57 million by France in the punishments imposed for violations of the sweeping General Data Protection Regulation (GDPR) legislation passed by the European Union. Fined for not properly disclosing or alerting consumers on how their data would be used, Google’s practices ran afoul of the new data privacy laws enacted in May 2018.

Consumers and corporations alike face unfortunate repercussions when cybersecurity precautions aren’t taken seriously. Gloomy statistics and stories of well-known corporations losing customer and vendor personal information to large-scale data breaches fill the news on a near daily basis. The frequency of data breaches has increased to an unprecedented rate, and the cost continues to rise each year. A study by the Ponemon Institute reports the average cost of a data breach is up 6.4 percent since 2017 to a whopping $3.86 million.

While there is significant press surrounding the fines organizations must pay for breaches and violations, the other less apparent and often difficult-to-quantify costs can be much greater, farther reaching and longer lasting. These may include reputational damage, loss of stock value, loss of current and future customers, class action lawsuits and remediation expenses from breaches such as notification costs or credit report monitoring for affected customers.