Data breaches have proved to be one of the most persistent forms of cyber attacks in the past few years.

In 2023, the global average cost of a data breach was reported to be $4.45 million.

That’s a 15% increase over 3 years.

How to prevent a data breach then?

Every week, new businesses make it to the headlines falling victim to data breaches.

Some of them barely recover from the reputation damage while others never do.

Without strong and sufficient security controls in place, it’s only a matter of time before your business becomes another costly data breach statistic.

In this article, we’ll discuss the fundamentals of data breaches, how they happen, how you should respond to a data breach, as well as some effective tips on how to prevent a data breach.

What is a Data Breach?

A data breach is a security incident where malicious actors gain access to sensitive information and copy, transmit, or steal without authorization.

Data breaches are most common in industries that deal with a massive amount of personal data - such as the financial sector or healthcare industry.

However, with more organizations shifting to digital solutions, and increased connections between businesses, their vendors, and customers, almost every modern organization n is now a potential data breach target.

And it’s not just businesses that should be worried about data breaches. Cyber criminals can target anyone they can extract personal data from, as every personal or confidential data is valuable to them as long as someone is willing to pay for it.

How Do Data Breaches Happen?

A data breach happens when an unauthorized party gains access to critical data of a person or an organization. A data breach can take place in many different ways, including:

• Stolen or lost equipment: A lost computer, laptop, portable storage device, or smartphone containing confidential data can lead to a data breach if it ends up in the wrong hands.
• Third-party vendor breaches: Cyber criminals would sometimes target third-party vendors with access to an organization’s systems, instead of directly targeting the organization’s network. Since most vendors tend to have less secure cybersecurity standards than most high-value targets, targeting third-party vendors allows hackers to infiltrate their victims faster and with less effort.
• Stolen credentials: One of the most common ways attackers gain access to critical data is by using someone’s login credentials to sign into services. Cyber criminals use several strategies, like brute force attacks to get their hands on people’s login credentials.
• Social engineering: Social engineering uses psychological manipulation to trick people into giving up their sensitive personal information. For example, a hacker can pose as a government official and call their targets on the phone to convince them to share their bank account information.
• Vulnerability exploits: Modern organizations use a wide range of different software products to make their tasks easier. However, owing to their complexity, these software applications often contain flaws, also known as “vulnerabilities”. Cyber criminals exploit these vulnerabilities to gain unauthorized access to confidential information and view, copy, or damage them.
• Insider threats: Sometimes, the threat doesn’t come from the outside, but from the inside of an organization. Insider threats involve people who have access to confidential information that deliberately or mistakenly exposes confidential information.
• Malware infections: Sometimes attackers would inject malicious software programs into an organization’s network to breach data. These malicious programs are designed to steal data, monitor user activities, and send information they collect to a server controlled by the attackers.
• Point-of-sale attacks: Some attacks target credit and debit card information, involving the devices that scan and read these cards. As an example, criminals would set up fake ATMs or install separate scanners onto a legitimate ATM to gather card numbers and PINs.
• Misconfigured web app or server: Some websites, applications, or web servers lack proper setup, allowing anyone to access their data. This can expose confidential data to anyone who may accidentally stumble upon it, including attackers who are purposefully looking for it. Lack of encryption also allows anyone to access sensitive data by monitoring transmissions between the user and the website.
• Credential stuffing: Cyber criminals use login credentials exposed in a data breach to gain access to other platforms. That’s why it’s recommended to use different combinations of usernames and passwords on multiple services. Otherwise, an attacker will easily gain access to the victim’s email, social media, and/or other online banking accounts.

What Can Attackers Do With Breached Data?

Cyber criminals target organizations to extract high-value data, such as corporate confidential information or personally identifiable information (PII), and sell them for financial gain, causing harm to the individual or organization. And with the advancement of technology, cyber criminals, and their methods are becoming more and more sophisticated.

The effects of a data breach can be massively damaging. It can lead to organizations losing their data, which can include sensitive financial information or corporate secrets, but they may also face severe fines, financial penalties, and reputational damage, which can be irreparable.

Attacks on government facilities can result in highly confidential and information, such as military operations, political dealings, national infrastructure details exposed to enemy states, which can threaten the government and its citizens.

Individuals suffering from data breaches may lose their personal data, such as banking information, healthcare data, social security numbers, etc., which can lead to identity theft, losing access to their social accounts, impact their credit scores, monetary loss, and even the risk of facing legal troubles.