It’s one of the scariest outcomes of a cyber attack. A data breach’s effect can easily bankrupt a company, and even if appropriately handled, its consequences are often felt for months or years to come.

One of the biggest issues with data breaches, and what is often the most damaging outcome, is the loss of trust from customers. After all, if a breach happened once, how do you know it won’t happen again?

This uncertainty is why transparency is crucial in this kind of situation. Shockingly, a recent survey of over 400 IT professionals revealed that 71% of US-based respondents had been instructed to keep a data breach under wraps when they knew it should have been reported to the public.

Not only is this illegal in several parts of the world, this can cause endless ramifications for your company and your customers. This article will review how data breaches happen and how to stay protected.

What Is a Data Breach?

A data breach is a cyber security incident where criminals, hackers, or disgruntled ex-employees gain unauthorized access to sensitive company data such as trade secrets, internal communications, customer login information, or personal information of clients.

The goal of such an attack is to sell the information on the dark web for a profit, use stolen trade secrets to ransom the target company, or cause a company’s stock to fall due to the results of the breach.

Why Do So Many Data Breaches Go Unreported?

For many IT professionals, a data breach is a serious blemish on their record and often a cause of shame or outright firing. However, the most common reason these attacks go unreported is less on the IT team and more on the executive team.

Some managers and directors tend to be more concerned with the optics of publicizing such a breach and the effects on quarterly revenues, stock price, and customer loyalty. For this reason, they believe it’s best to keep data breaches under wraps, fix them, and put in place better security measures.

Transparency After a Data Breach

It’s crucial to report a data breach to the appropriate authorities as soon as it occurs, especially if it involves personal information.

One reason is that companies in many parts of the world can face heavy fines for failing to report data breaches. Data breaches due to malicious acts is a crime and needs to be properly investigated.

Second, organizations may face significant fines for failing to report the event. Failing to report data breach incidents can mean huge financial set backs and legal complications.

With the implementation of various privacy laws across the globe such as the General Data Protection Regulation (GDPR) in the European Union and the California Consumer Privacy Act (CCPA) in the United States, the rules surrounding data breaches have become much stricter.

Third, it helps maintain customer trust. Organizations that hide data breaches increase their risk of reputational damage and, as a result, losing current and future customers. Take Desjardins’ large-scale data breach incident in 2019, for example.

After the breach, the company disclosed the incident and conducted efforts to secure its members’ personal data, including creating a Desjardins Security Office and an Information Security and Privacy Protection Improvement Program, security screening, employee awareness training, and a series of policy updates and data monitoring.

Although the company saw a dip in revenue in 2019, these efforts to strengthen security controls and be transparent with its members helped its reputation, with clients believing they were more secure than ever.

This reinforced trust helped the company earn an operating income of $18,399 million in 2020 compared to $17,862 million at the time of the breach in 2019.

Lastly, organizations have a duty to their customers to report data breaches so they can quickly change their passwords and take other required security measures, such as freezing their credit cards.

A data breach is never limited to the initial attack, and reporting the initial point of failure helps mitigate the other ramifications.

What Are the Most Common Causes of Data Breaches?

In order to be protected against data breaches, it is crucial to understand how they happen and which ones are on the rise. Here are the most common ways data breaches occur:


Whether done via email, text, or voice message, successful phishing attempts almost always result in data breaches. Data breaches via phishing can happen simply by the victim surrendering information after spear phishing or entering login information in a spoofed website.


Most malware on the web has information theft as a goal. For example, a keylogger can identify login information, and other malicious software can downright copy or transfer sensitive company information.


Another often overlooked cause of data breaches is improper third-party risk management. In this day and age, companies almost always have an extensive network of partners they work with, but most importantly, share information with.

From data storage to CRMs and financial services, the opportunities for data breaches have multiplied over the years because of the interconnected nature of our world. Since every contact or exchange with your partners can be a vulnerability, these relationships should be heavily scrutinized.

This is the main reason why it is crucial to take the time to determine if and how you will disclose any data breach publicly. Your duty isn’t only to your customers and any potential partners you work with. In the event that you experience a data breach, your partners will also need to beef up their security measures.

How To Prevent a Data Breach

Data breaches are such a devastating, difficult-to-resolve impact of a cyber attack that it is worth investing a lot of time in preventing them and preparing for the eventuality that one may occur. Thankfully, most of these solutions are relatively easy to implement.

Secure your systems

While most data breaches result from human errors, you should not underestimate traditional software vulnerabilities. From operating system updates to patches on specific software your company uses, it is crucial to keep everything updated to its latest state to protect yourself from trending hacks.

Another trending method to secure your network is Zero Trust Network Architecture. With this type of protection, even a successful cyber attack might not result in a data breach since hackers will be contained to benign portions of your network.

Conduct phishing simulations

One of the most common attack vectors leading to data breaches is phishing. There are no two ways about it; the best way to teach people about them is to provide them an opportunity to practice.

Besides simulations, the most important aspect of phishing training is recognizing various scenarios and signs of phishing. These training modules are easy to run and can be kept varied via video and image-based content.

Backup your systems

One of the reasons why data breaches can be particularly devastating is that they make companies victims of ransomware, causing them to lose business-critical data. Regular off-site backups of all sensitive data are a no-brainer, and any investment made towards them easily repays itself in the event of a cyber attack.

A backup of your systems will help restore them to their previous state before the breach. For most companies, a cloud backup with a reputable provider is enough. If you manage a larger organization, you must have on-premise backups that you can physically access and protect.

Cyber security awareness training

The leading cause of data breaches is related in some way or another to human error. This often stems from poor or outdated knowledge about cyber security threats. Hackers and scammers are constantly working to find new attack angles, and it’s a company’s responsibility to educate its staff about them.

Make sure to have varied and engaging content that encourages learning by your employees. Also, make sure to keep it updated and ensure it covers important topics like phishing, data management, and password hygiene.

Be prepared

Assemble an incident response team that will define the process for handling and reporting data breaches. Being prepared with procedures, sample communications and established roles and responsibilities can help increase your response time and handling the event efficiently.

Transparency is Crucial After a Data Breach

Since data breaches can be so damaging to a company, your best bet is, of course, to make sure you stop them before they even start. Your employees are your first line of defense. However, human error happens, and it’s essential to have a plan in the event of a breach.

Have an up-to-date communication plan ready to deploy as soon as a data breach happens. Do not wait until the breach to start taking action, and wonder how to inform all your clients and partners on multiple channels.

It’s essential to have a system to notify your clients and partners as soon as possible. A well-crafted and up-to-date incident response plan will ensure the optimal handling of a data breach with the best possible outcome.



Are you wondering if your staff would “click”?

Because phishing is one of the primary attack vectors to cause data breaches, you must equip your staff with the knowledge they need to avoid cyber attacks. Start with Terranova’s FREE phishing simulation today to get a grasp of the state of your cyber security.