Losing Reputation: Cyber Attack Tsunami
Reputation management is a vital component of running a successful business. Reputation is the public perception of the company, business, and workings. It is a company’s image that drives customer traffic. Businesses with a good brand image are perceived as more reliable. It provides opportunities for such companies to charge their customers revenue-yielding prices for their products and services. Reputation also promotes customer loyalty, and word-of-mouth marketing adds to brand awareness and, in effect, cuts down on marketing costs.
While there are multiple threats to reputation, cyber-attacks are a factor that severely impacts a company’s image. Any cybersecurity breach can potentially damage your customers’ perception of your company leading to significant losses, negative publicity, and in some cases, even shutting down a business. Therefore, it becomes vital that a company handles cyber threats with care to manage its reputation.
Cyber Attack Tsunami
Cyber attacks are malicious or accidental threats that might exploit your device or network vulnerabilities and breach your data. They have been a common phenomenon since the boom of the internet. Hackers develop increasingly sophisticated methods to attack a company’s servers or devices to steal or destroy data. From phishing emails to ransomware, the digital transformation of businesses has always given rise to cyber threats. Cyber attacks are a skyrocketing trend in today’s digital economy.
A cyber attack, if successful, can severely impact your business. The consequences of a cyber attack can be of two different types:
- Financial: Cyber attacks inevitably cost companies a loss of revenue. The financial cost of a cyber attack includes corporate information theft, theft of financial credentials and money, hindrance in conducting revenue-yielding trade, loss of clients, etc. Another factor of economic damage is the cost incurred by companies to handle and recover from the outcome of cyber attacks.
- Reputational: The trust a customer places in your company is the foundation of any lasting business relationship. A lapse in cyber security can negatively impact a customer’s confidence in your brand. It can result in a loss of customers, which leads to a loss of sales and revenue. Reputational damage is not limited to customers. It can also influence your business relationships with third-party entities such as vendors and supplies.
Read more about the reputational damage from the cyber attack tsunami.
Every company bears the risk of reputational damage. Minor cases of failures in customer service and defective products can cause customers to second-guess their trust in a company. Such damage is repairable with solutions like freebies or discounts.However, It is a different scale when a company’s security is breached, and it loses valuable customer data.
From banking credentials to login passwords, trade activities involve exchanging confidential information. A lapse in cyber security around payment gateways and portals can result in a massive loss to the company’s reputation.
Reputational damage not only results in the loss of existing customers but also bears the risk of losing potential customers. Word-of-mouth spread of any news about a data breach can cause potential customers to move on to other options in the market. Companies spend millions to repair the damage caused by cyber-attacks. They must restore public perception by spending resources on implementing new security layers. It must then be marketed to convince former and potential customers alike that your company is secure and trustworthy.
A simple example of such an instance would be the 2021 Facebook data breach. In 2021, over 500 million Facebook users got their personal information leaked to a public hacker forum, causing a massive online storm that severely impacted Facebook’s reputation. Users questioned Facebook’s protection of their privacy. The social media giant had to spend resources and time to remedy the issue.
Impact on Customers
When a customer engages in business with a company, there is a significant exchange of information. In today’s internet-based business world, information security is vital to maintaining a lasting business-customer relationship. Customers prioritize privacy, and a company needs to protect their personal information. Customer data includes their names, email addresses, banking information, etc. Maintaining the privacy of a customer’s data can cement their trust in your company and its workings.
Cyber security implies that customer data is also protected along with the company’s data. Companies regularly access multiple exploitable customer data, from personal to financial information. In a breach, any leak or theft of such information can result in a range of damage to a customer’s life and livelihood. For instance, most internet users have the habit of assigning the same password to different platforms and accounts. If such crucial information were to fall into the hands of a malicious hacker, it could potentially ruin a user’s life.
A primary example would be the Equifax data breach of 2017. Equifax is a company that primarily deals with data traffic. Around 143 million consumers had their personal data breached. It included names, dates of birth, personal addresses, addresses, and in some cases, even credit information. This breach opened up opportunities for multiple instances of identity theft and fraud, and the number of victims affected would have been numerous.
In most cases, companies that lack cybersecurity awareness fall victim to cyber-attacks leading to a loss of brand image, which results in a loss of sales and revenue. A pattern of a purely reactive approach to cyber attacks can be easily observed.
Reputation management related to cyber security has to begin in the early stages of a company. A proactive approach can help businesses maintain or regain customer trust in the case of a security breach. Here’s a list of measures a company can take to combat reputational risk from cyber threats proactively:
- Access management: Restrict access to confidential and exploitable data. Establish a zero-trust networking structure. It essentially means that all third-party entities are screened and approved before joining hands with your company.
- Purchase access control systems: Access control systems help companies audit all users that can access, change, or approve data and permissions.
- Invest in cybersecurity: From the initial stages of a company’s journey, it is advisable to invest in quality cybersecurity systems. From apps to companies, companies can choose from a wide range of cyber security providers. Bug bounty can be considered as a strong method for a company protect their data since the potential security vulnerabilities in their systems are constantly reported by cybersecurity experts.
In case of a cyber-attack, companies can manage and maintain their reputation by promoting transparency. Once a cyber attack has been realized, the initial step would be to spread awareness about the breach. The time it takes for a company to announce a data breach substantially impacts its reputation. A company’s open admission of a security lapse and the remedy pace can make or break how a customer perceives the company.
BugBounter’s Bug Bounty Can Help You Keep Your Image Reliable
BugBounter offers companies a bug bounty platform which is 24/7 available, flexible, and cost-effective. We have an ever-growing platform of more 2.500 cybersecurity experts eager to detect and report the security vulnerabilities in your systems. On our cost-effective platform, you can choose the amount of the reward according to your budget, and only pay when a valid security bug is reported.
Connect with BugBounter today, and we can decide what would be the most effective option for your business.