COLUMNS

Fines and Lawsuits Are Adding to the Cost of Corporate Data Breaches

Nov 13, 2018 | 10:00 GMT

An employee of Cathay Pacific Airways helps a customer at Hong Kong's international airport on Aug. 7, 2018.

An employee of Cathay Pacific Airways helps a customer at Hong Kong's international airport on Aug. 7, 2018. The airline was hit by a cyberattack that compromised personal information on up to 9.4 million passengers.

(ANTHONY WALLACE/AFP/Getty Images)

Highlights

  • Cyberattacks that lead to data breaches are not only damaging to companies and the individuals affected but are also a national security concern.
  • Regulatory and legal bodies are increasingly punishing organizations that suffer data breaches with fines and settlements.
  • Given new legislation and increasing attention to the victims of data breaches, the number of cases and total cost are poised to increase dramatically.

Hackers around the world are constantly probing for network vulnerabilities and seem to score a major cyberattack almost weekly. In the past three weeks alone, HSBC Bank of London reported that its U.S.-based accounts were illegally accessed; hackers compromised an Australian military shipbuilder's personnel files; and Hong Kong airline Cathay Pacific confirmed a breach that affected up to 9.4 million passengers. These criminal and state-backed groups are trying to get personal information such as names, phone numbers, addresses, Social Security numbers, and credit card and banking information. They can sell that data to others who exploit it for financial gain, or use it for more targeted attacks – a national security, as well as a corporate, concern. Now governments in Europe and North America are pushing companies harder to shore up their defenses and fining those that are lax. On top of that, those that lose customers' information are increasingly...

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