THE SOFT COSTS OF A DATA BREACH
Co-Founder of TokenEx®, the Expanding Cloud-Based Data Tokenization Resource, Reveals the Hidden Costs of Hacks
According to the Ponemon Institute's 2014 Cost of Data Breach Study, the average financial cost for each stolen record rose from $188 to $201, and the total average cost paid by an organization recovering from a breach rose from $5.4 to $5.9 million. “The hard cost, financial implications of a data breach can be astronomical for a company, university, or healthcare organization,” says Alex Pezold, CEO and co-founder of TokenEx, an enterprise-class data security platform that offers virtually unlimited flexibility in how customers can access, store, and secure data to avoid breach. “However, there are many other ‘soft’ costs that also need to be considered and avoided with new technologies for data security.”
What are some of the less tangible, but highly impactful “costs”? Pezold says jobs, investor jitters, corporate reputation and the additional costs to recover lost trust from the business or consumer sectors all have to be factored into the total. “A CIO and the team he or she leads is often replaced with a different group that works to implement a new solution to prevent this in the future,” adds Pezold, “so job security is dependent on data security.”
“Stock prices of publicly-held companies can plummet if a core business practice or sales are impacted once a breach occurs,” adds Pezold. “The ripple of data loss impacts all stakeholders.”
“In addition to the CIO being replaced and stock value turbulence, the effect on corporate reputation and consumer trust can linger much longer and hit deeper than the actual breach,” explains Pezold. “There was a significant drop in sales following the much publicized Target breach earlier this year, and we see this drop in consumer confidence after a breach across all industries – retail, healthcare, academia, etc.” This need to rebuild trust hits the bottom line, can de-motivate employees and can become a backwards distraction that stalls or reverses positive momentum.
“With endless flexibility in how our customers can access, store and secure data, TokenEx is able to tokenize and secure almost any data type a company or organization works with, including payment card data, financial account numbers, HIPAA records, and even unstructured data formats,” explains Pezold. “With tokenization, the importance and necessary regulatory requirements – which are tightening – to keep data safe is no longer a barrier to business productivity or budgets, especially when you see the hard and soft savings this safety can ultimately provide.”
TokenEx was founded in 2010 by Alex Pezold and Dr. Jerald Dawkins. With the continued increase of payment card fraud and data breaches, they saw an opportunity to use a combination of technologies (tokenization, encryption and key management) to reduce the risk of handling payment card data for merchants and personal data for organizations (academia, healthcare, etc.) To date, TokenEx has been privately funded and received state grants in order to develop its patent-pending technology. In its short lifespan, TokenEx has already received awards for its innovation and has also been featured in a myriad of trade periodicals.
For more information on the various industry sectors TokenEx services, or to sign up for a free 30-day trial, visithttp://www.TokenEx.com.