Many of us know the obvious consequences of a data breach, like regulatory fines and monetary loss.
Yet, a data breach can have widespread impacts that go beyond the obvious in the Alternative Investment space. Here are 3 not-so-obvious dangers of a data breach to address:
- Attracting the attention of other cybercriminals
After suffering a data breach, your firm can become a tempting target for copycat attacks.
Once hackers recognize that your defenses can be breached, they will begin their hunt for potential vulnerabilities to exploit again. As a result, your response to a breach and the speed with which you improve your cybersecurity are vital for preventing future attacks.
Many aspects of your digital infrastructure can generate weaknesses, including external service providers like vendors. Cybercriminals seek to capitalize on previously exploited weaknesses, making it a necessity to invest sufficient resources into assessing and improving your cybersecurity strategy.
Read: Exploitation of MOVEit software demonstrates the criticality of vendor due diligence.
Read: How Do Some Companies Get Compromised Again and Again?
- Increased cyber insurance premiums
Another often overlooked consequence of a data breach is the impact on cyber insurance premiums.
Insurers assess the risk profile of a company when determining premiums, and a history of data breaches significantly increases the perceived risk.
In response to a breach, you may face substantial hikes in insurance premiums or encounter difficulty securing comprehensive coverage. This compounds the already significant costs associated with recovering from a breach, including legal fees, regulatory fines, and compensation for affected parties.
Prioritizing cybersecurity will impact your cyber insurance premiums, which is why cybersecurity firms like Drawbridge have strategic partnerships with insurance companies that provide firms with preferred pricing on cyber insurance.
Read: Cyber insurance providers increase scrutiny on enterprise risk, report finds.
- Loss of competitive advantage
In today’s fiercely competitive fundraising environment, Alternative Investment managers must constantly differentiate themselves to attract investors. Continuously evidencing a robust cybersecurity posture is increasingly becoming a critical factor in this differentiation process.
A cyber attack not only exposes vulnerabilities within the firm but also tarnishes its reputation as a trusted steward of investor capital. In an industry where trust is paramount, the ability to evidence that investments are protected against such threats becomes a powerful competitive advantage.
Read: The Devastating Business Impacts of a Cyber Breach.
Recommended next steps—Prevent cyber attacks with comprehensive risk assessments.
Knowing the full scope of consequences that come from a data breach can help you establish an effective cybersecurity strategy. Comprehensive risk assessments play a pivotal role in enabling a proactive approach to addressing vulnerabilities in your systems.
Drawbridge provides detailed solutions for cyber risk assessments, vendor risk assessments, vulnerability scanning, and cyber training. With Drawbridge, you can safeguard your business from bad actors without hindering your growth or harming investor trust.
Reach out to a Drawbridge representative today to get started.
