Data breaches: How they happen and how to deal with them

According to the Ponemon Institute’s Cost of a Data Breach Report 2021, the average total cost of a data breach increased by nearly 10%, rising from $3.86 million in 2020 to $4.24 million in 2021, the most common data breach being stolen customer personally identifiable information (PII). It took an average of 287 days to identify and contain a data breach. 

Such grim statistics on data breaches should be a wake-up call for businesses to be on guard and protect their data. This article will delve into what data breaches are, how to spot and report one, and how to protect your business. 

What is a data breach?

A data breach occurs when data is accessed without authorization. The data is usually proprietary or confidential information. It includes things like personal identity information, credit card numbers, customer data, trade secrets, etc.

Types of data breaches

The most common data breach is the theft of customers’ personally identifiable information. This is information that can identify a person, including their name, phone number, email, physical address, and social security number. 

Stolen financial data is the second most common type of data breach. This involves stealing banking information, credit card information, email addresses, passwords, and usernames. Criminals then use the data to steal money and make fraudulent purchases.

Data breach examples

In November 2021, stock trading and investment app Robinhood had a data breach where 5 million user email addresses were stolen. The hacker also made away with the full names of 2 million of its users. After the fact, the hacker demanded an extortion payment not to release the information. 

Robinhood reported the matter to law enforcement and contracted Mandiant, a leading cybersecurity firm, to help resolve the data breach. Robinhood later contacted the account holders whose information was compromised and issued a statement to the public about the data breach.

How do data breaches happen?

According to the Verizon 2022 Data Breach Investigations Report, the most common way that data breaches happen is through criminal hacking. This shouldn’t come as a surprise. The methods used are mainly phishing, brute force attacks, spyware, and malware.

Data breaches also happen internally. For example, an employee accidentally reading files on a coworker’s computer without authorization is considered a data breach. Though the access may be unintentional and the information is not shared, it is still a breach. On the flip side, you might have a malicious employee who may or may not have authorization to a set of data who deliberately accesses it and uses it for nefarious activities.

How to identify a data breach

Here are some of the signs that you may be the victim of a data breach:

• Finding your company’s confidential data online
• Unauthorized downloads within your network
• Strange login attempts from unexpected locations
• Increased system activity at uncommon times
• Recurrent system crashes
• Unexpected password changes and user account lockouts
• Disruption of e-commerce payments

How to report a data breach 

Once you’ve noticed a data breach, it’s important that you report it immediately. How you report will depend on where your business and customers are. In the US, according to the NCSL, there is legislation in all 50 states that requires businesses to notify their customers whenever there is a data breach. 

If your business is in the EU,  the GDPR covers data breaches. Under the GDPR legislation, a data breach must be reported to a Data Protection Authority (DPA) within 72 hours of knowing about the breach.

How to prevent a data breach from happening

To prevent a data breach, the best defense is a good offense, as the saying goes. By being proactive rather than reactive about your data security, you will have an upper hand in protecting yourself against potential attacks. Here are a few things you can do:

Limit data access

One of the simplest strategies to prevent a data breach is to partition and limit access to your data. Have employees only access data they need to work with. In the case of a malicious data breach, it will be easy to identify the suspect. 

Update your company software regularly

Outdated software makes your system vulnerable to attacks. Software updates patch up security holes that were present in previous versions of the software. Make sure you’re regularly updating your company software.

Change passwords often

When hackers get their hands on the passwords to your accounts, they keep logging into them. To secure your accounts, make it a habit to change your passwords every 90 days—and make sure they’re hard to figure out.

Secure your BYOD 

BYOD (bring your own device) is becoming commonplace in the workplace. However, it poses a significant risk to company data. Consider securing BYODs with business-grade antivirus and VPN.

Protect your company from a data breach with Lytics

As a leading customer data management platform, Lytics ensures your customers’ data is protected. We adhere to the GDPR and CCPA and recognize that you, the customer, control the personal information that we process for you. Sign up today for a free Cloud Connect account on Lytics, knowing your data will be protected.