What is a Data Breach? A Guide to Response and Prevention

In this article, you'll find:

• Data Breach Overview
• Consequences of Data Breaches
• Preventing Data Breaches
• Responding to a Data Breach
• Data Breach Trends and Statistics
• How Can Organizations Protect Personal Data?
• Regulatory Compliance Relating to Data Breaches
• Your Business Strategy

Data breaches are security incidents where sensitive, protected, or confidential data is accessed, disclosed, or used without authorization. They can occur on various platforms, including user databases, corporate networks, and personal devices. Incidents typically involve the loss or theft of individual or organizational data such as personal information, financial records, health information, intellectual property, and other valuable data.

The three primary types of data breaches are:

1. Unauthorized access that occurs when an unauthorized individual or entity gains access to data or systems through hacking, internal misconduct or error, or other means.
2. Unauthorized disclosure, where sensitive information is exposed or shared without proper authorization. This can occur through accidental data leaks, such as misconfigured databases or email errors.
3. Data loss involves the unintentional destruction or loss of data due to hardware failures, natural disasters, or human error.

Common breach techniques include:

• Phishing. Attackers use deceptive emails or messages to trick individuals into revealing sensitive information or clicking on malicious links that install malware.
• Malware. Malicious software, such as viruses, ransomware, or worms, is used to infiltrate and damage systems, steal data, or disrupt business operations.
• Hacking. Cybercriminals exploit software, network, or system vulnerabilities to gain unauthorized access to data.
• Insider threats. Employees or partners with legitimate access misuse their privileges to steal or expose data.
• Physical theft. Thieves steal laptops, hard drives, or paper records containing sensitive data.
• Exploiting weak passwords. Simple or generic passwords that aren’t protected by multi-factor authentication.

Whichever techniques a cybercriminal employs, breaches have far-reaching consequences, jeopardizing user privacy, putting a company’s financial assets at risk, and damaging reputations. To protect themselves from these threats, organizations must adopt advanced data security solutions that include, among other features, continual systems monitoring, encryption, access controls, security audits, and employee training. Fostering an organization-wide cyber awareness culture can also help prevent and mitigate a data breach’s impact and ensure a swift and efficient recovery.

Data Breach Overview

Organizations that fail to protect sensitive data face increasingly stringent fines and penalties. The $575 million-plus that Equifax agreed to pay for its 2017 breach that exposed the personal information of 147 million was once the largest fine of its kind. It has since been eclipsed by the nearly $1.2 billion fine levied against ride-sharing firm Didi Global for violating China’s data protection laws.

Most businesses understand that data breaches are a growing threat. However, many still don’t have adequate protection measures in place to prevent them, and they don’t know what to do if a breach occurs. They’re prime targets for hackers who relentlessly attack them from multiple angles, using ever more sophisticated tactics to exploit security weaknesses and steal personally identifiable information (PII) that they then hold for ransom or use for identity theft, fraud, and selling on the dark web.

Minus robust security measures and a clear incident response plan, any organization of any size is vulnerable to significant financial and reputation damage, as well as legal and regulatory consequences. Big or small, a data breach is costly to recover, so businesses must adopt proactive, preventative techniques to stop them in their tracks.

Is your business at risk of a data breach? If you collect, access, and store valuable customer, client, or employee information, the answer is yes. The best approach to data security is to assume your organization will be a target and then incorporate digital strategies and tactics that keep everyone and everything, including your reputation and financial well-being, safe.

Consequences of Data Breaches

It can’t be said too often or emphatically: data breaches have far-reaching consequences for individuals and businesses, impacting them financially, legally, and to their reputation.

• Financial impact. A data breach’s immediate financial consequences can be staggering, with businesses incurring substantial costs as they investigate the breach, notify affected parties, and offer restitution. Revenue loss can result from downtime or a decline in customer trust. Individuals who have their PII stolen in a breach can experience identity theft, resulting in unauthorized transactions, credit score damage, and long-term financial repercussions.
• Reputation impact. Reputation harm following a data breach can be more devastating than financial losses, and it can come from all directions. Breaches often erode customer trust and loyalty, leading to a drop in revenue. Negative media coverage can impact stock prices, and companies might find it difficult to recruit and retain top-tier talent.
• Legal and regulatory consequences. A data breach can also trigger legal and regulatory repercussions, with businesses facing lawsuits from affected individuals or groups and fines and penalties from regulatory bodies like the GDPR and CCPA for failing to protect sensitive information.
• Personal and business effects. Beyond financial, legal, and reputation consequences, data breaches can have a profound impact on individuals and organizations. Individuals might suffer from stress, anxiety, and a loss of trust in digital transactions, while businesses could see a decline in competitive advantage, disruption of operations, and a breakdown in trust with stakeholders.

These and other data breach consequences underscore the importance of robust data security practices and proactive measures that protect sensitive information from unauthorized access or exposure.

Preventing Data Breaches

Strong cybersecurity measures, employee training and awareness, and implementing data encryption and access controls are essential first steps in preventing data breaches and safeguarding sensitive information. Prioritizing these preventive measures ensures organizations are doing their utmost to significantly reduce data vulnerability and protect the integrity and confidentiality of their data.

Importance of Strong Cybersecurity Measures

Which cybersecurity measures a business uses varies depending on specific needs and regulatory requirements. In any case, adequate protection against threats like malware, phishing, and hacks generally includes:

• Regularly updating software and systems to patch vulnerabilities.
• Deploying firewalls and antivirus software to detect and block malicious activities.
• Conducting regular security audits to identify and address potential weaknesses.

Advanced cybersecurity solutions strengthen an organization’s resilience, protecting data and helping businesses recover rapidly at enterprise scale.

Employee Training & Awareness

Human error, including weak password practices, phishing susceptibility, and misconfigured security settings or access controls, is a frequent factor in data breaches. Organizations must foster a culture of security awareness among employees, including routine training sessions that educate staff about the latest threats, the importance of following security protocols, and how to recognize and respond to suspicious activities. Mandatory strong, unique passwords and protocols for handling sensitive information can also reduce data breach risks.

Implementing Data Encryption & Access Controls

Data encryption adds an extra layer of security, making PII unreadable to unauthorized users, even if the data is intercepted or accessed without permission. Access controls are crucial tools in limiting who can view or interact with sensitive data, ensuring that users only have access to the information necessary for their job functions.

Responding to a Data Breach

So, what do you do if a data breach has already occurred at your business?

The hours, days, and weeks following a data breach are critical to limiting damages. A quick response allows your business to emerge from the crisis well-positioned to defend its reputation and bottom line. You must address vulnerabilities, notify affected parties, inform law enforcement, and prepare for post-breach activities.

The faster your company responds to a data breach, the more likely you’ll minimize the breach’s impact and reduce potential damages.

1. Create an incident response plan. A well-crafted incident response supports a swift and effective response to a data breach. It should set out the steps to be taken in the event of a breach, including identifying the breach, containing it, and assessing its scope and impact. It should also designate a response team for managing the situation, including IT professionals, legal counsel, and communication specialists.
2. Notify affected parties. Supply affected individuals with notice of the breach, the type of data compromised, and the potential risks. Provide guidance on how people can protect themselves, such as changing passwords or monitoring accounts for suspicious activity.
3. Inform authorities. Notify relevant law enforcement and regulatory bodies according to your sector’s legal requirements and industry standards. The Federal Bureau of Investigation (FBI) is the lead federal agency in the U.S. for investigating cyber attacks. Its Internet Crime Complaint Center (IC3) is a central hub where the public can also report Internet crimes or potential criminal activity. In the UK, the National Crime Agency (NCA) works similarly to the FBI in battling cyber threats. Organizations such as INTERPOL, with its extensive global reach, have been crucial in encouraging international law enforcement cooperation and facilitating the sharing of critical cyber threat intelligence.
4. Mitigate further damage. Once a breach is detected, immediate steps should be taken to contain and control it. This typically includes isolating affected systems, revoking access to compromised accounts, and deploying patches or updates to address vulnerabilities. Conduct a thorough investigation to understand how the breach occurred and develop solutions that prevent similar incidents in the future.

Fortunately, advanced technologies are making it more straightforward and efficient to address and prevent data breaches, offering:

• Detection and analysis features that identify a breach and determine its nature and extent.
• Containment steps that limit a breach’s spread and impact.
• Removal of the breach’s cause and securement of affected systems.
• Recovery features that restore affected systems and services to normal operation.
• Post-incident review that analyzes a breach response and implements improvements to prevent future incidents.

Data Breach Trends and Statistics

The types of breaches occurring might differ, but trends and statistics show that, when it comes to data breaches, bad actors don’t discriminate. And they’re using evermore sophisticated techniques that pose ongoing challenges to data security.

• The vast volume of sensitive personal and medical information that the healthcare sector manages makes it a prime target for attackers who use the data to commit identity theft, insurance fraud, and more.
• Financial institutions face similar risks, with hackers targeting customer data and financial transactions.
• Retailers and eCommerce industries process vast amounts of payment and personal data that hackers can steal and use to commit credit card fraud, phishing schemes, and creating fake accounts.

Emerging data breach trends include the use of sophisticated ransomware attacks, where hackers encrypt an organization's data and demand a ransom for its release. As more businesses migrate to cloud environments, there’s been a significant uptick in cloud services and remote work infrastructure exploitation. Supply chain attacks are also on the rise, with hackers targeting less secure elements in an organization's supply chain to gain access to its network, highlighting the importance of ensuring security within an organization and across its partners and suppliers.

Website breaches are another area of concern, with attackers finding flaws and loopholes where they can do everything from injecting and executing malicious SQL code in a web app’s database to leveraging flaws in a site’s authentication mechanism. DNS spoofing or cache poisoning is a significant problem, as are distributed denial of services (DDoS) and cross-site scripting (XSS) attacks.

Recent significant breaches include:

• U-Haul. An authorized actor used legitimate credentials to access a customer reservation system to access and compromise the personal records of 67,000 customers.
• Cencora. A cybersecurity incident at the pharmaceutical giant resulted in the theft of data, including some with PII, although it’s unclear if the information belonged to employees or customers.
• Walmart. Criminals used a stuffing or phishing attack to penetrate the retailer’s Spark Driver portal, obtaining drivers’ social security numbers, driver’s license numbers, dates of birth, names, and contact information.
• LoanDepot. Nearly 17 million customers were impacted by a breach where hackers obtained customer names, addresses, email addresses, financial account numbers, and more.

And the list goes on. The notorious BlackCat ransomware gang is once again targeting the healthcare sector in retaliation for law enforcement interference. Its attack on ChangeHealthcare resulted in the theft of 6TB of data, including solution source codes and information on thousands of providers, pharmacies and insurance companies. In Brussels, two lawmakers discovered malware infections on their government phones, ringing alarm bells about confidential defense work. And EasyPark, the EU’s largest parking app used in over 20 countries, was attacked by the ransomware group DragonForce, resulting in the data leakage of about 600GB.

With the annual cost of cybercrime now estimated at $11.5 trillion, it’s clear there’s an urgent need for robust cyber-resilience strategies.

How Can Organizations Protect Personal Data?

Two of the most effective ways for companies to protect personal data are adhering to best practices and implementing robust security measures to safeguard against data breaches. Best practices include:

• Establishing a comprehensive data protection policy that outlines how personal data is collected, used, stored, and disposed of.
• Conducting routine risk assessments to identify potential vulnerabilities.
• Implementing measures to address potential and actual attacks.
• Maintaining customer transparency about data collection and usage practices to build trust and ensure regulatory compliance.

Together with developing an incident response plan, security measures should be put in place that:

Safeguard personal data, accounts, and passwords. Tools like encryption make PII unreadable to unauthorized users. Strong access controls limit who can view, retrieve, and use data, while multi-factor authentication provides an additional layer of security for accounts and passwords. Regularly updating security systems, software, and procedures also helps to protect against known vulnerabilities. Data backups and recovery options ensure critical information can be restored quickly in the event of a breach or system failure.

Monitor for signs of identity theft. Routine remote monitoring of systems and networks for unusual activities can predict potential threats or identify ones that have already occurred. This can include monitoring access logs, setting up intrusion detection systems, and conducting regular security audits. It’s also critical to educate employees about the signs of identity theft and how to report suspicious activities.

Prevent data breaches from occurring. Firewalls, antivirus software, VPNs, and intrusion detection systems are the foundation of a strong cybersecurity strategy. Routine employee training on security best practices teaches them how to practice better online security and keeps them up-to-date on trends and the latest response options.

While overhauling your organization’s data security strategy can require significant investment, AI and automation are helping businesses lower their threat detection and response costs by more than half compared to companies that rely on less sophisticated technologies. AI-powered solutions like security orchestration, automation and response (SOAR), endpoint detection and response (EDR), extended detection and response (XDR), and user and entity behavior analytics (UEBA) allow you to identify threats early—even before they lead to data breaches—providing automation capabilities that enable a faster, cost-effective response.

Regulatory Compliance Relating to Data Breaches

Regulatory compliance is a vital concern for organizations that handle personal data, which today is nearly all of them. Various regulatory laws, including the GDPR in Europe and the CCPA in the United States, impose strict requirements on how companies collect, use, and protect personal information. The regulations also mandate timely notification to both authorities and affected individuals in the event of a data breach, often within a specific timeframe.

To maintain compliance and protect personal data, organizations must implement comprehensive data protection strategies that align with their business goals and these regulatory requirements. Regular risk assessments help identify potential vulnerabilities in data handling processes while implementing appropriate security measures assists in mitigating these dangers. Encryption, access controls, and regular system monitoring for signs of unauthorized access are essential components of a robust data protection strategy.

Organizations must also ensure that their policies and procedures are transparent and clearly communicated to customers and employees. This includes:

• Providing clear information about data collection practices.
• Obtaining consent where required.
• Offering options for individuals to manage their personal data.

Training employees in the organization’s data protection policies and the importance of regulatory compliance is also crucial. Businesses should also stay abreast of changes in regulatory requirements and adapt their data protection strategies accordingly. Regular reviews and audits of existing data protection practices help identify areas for improvement and ensure ongoing compliance with regulatory standards.

Your Business Strategy

The cybersecurity world is perpetually in motion, with new threats emerging daily. It’s crucial for organizations to stay ahead of these threats by investing in advanced data security solutions that allow them to respond to, protect, and prevent data breaches. Implementing strong cybersecurity measures, regularly updating systems, and educating employees helps organizations significantly reduce their vulnerability to attack, as does staying informed on the latest trends and statistics and adopting strategies that ensure sensitive data’s ongoing security.

Fighting AI-driven data breaches requires AI-powered data security systems that help businesses spot and stop malicious activity. A multi-layered approach to protecting data helps organizations solve their biggest data protection challenges and manage their data security with confidence. Resilience and protection are our highest priorities, and we’re committed to making sure they are yours, too.

Arctera offers an integrated portfolio of compliance and governance solutions that consolidate intelligence across data sources to surface relevant information, deliver actionable insights, and reduce the risk of costly regulatory fines.

Contact us today!