What’s the Link Between Information Security and Business Reputation?

The need for information security management is felt by organisations when it comes to developing their corporate reputation and maintaining it to seize a winning position in the market. Information or data breaches and cyberattacks not only affect an organisation’s operations, but they also shake the trust of the customers, employees, investors, suppliers, and other associated business parties. Clearly, for this reason, information security and business reputation go hand in hand. To put it simply, the more secure your information is, the better your business can maintain its corporate reputation. This blog explains how information security breaches can affect your stakeholders and the reputation of your business.

Importance of Information Security for Corporate Reputation Management

Many organisations, especially the small ones, are neither prepared nor concerned about information and cyber security risks. Customers are always more concerned than they are to ensure the privacy of their personal sensitive data. This behaviour of the organisation is often referred to as the cyber myth i.e., a thinking that “a security breach won’t happen to our organisation”. While this myth results in unpreparedness or the absence of proper information security practices in the organisation, any sudden cyber-attack or data breach would make customers and stakeholders lose faith in the business. A company takes years to gradually build its image and reputation. Hence, if it does not have practices for information security management, a cyber-attack can shatter its long-established reputation and take away its position in the market. The following key facts found by a recent KPMG supply chain research study further reveal the significance of information security for an organisation’s reputation.

• 83% of customers are concerned when a business has access to their data and use them
• 58% of customers said that they would not purchase from a business in future if there is an instance of information breach
• 94% of procurement managers said that information and cyber security is a crucial requirement while selecting a supplier
• 86% of the businesses would remove a supplier from their suppliers’ list if it comes across a security breach
• 31% of businesses suffered brand image damage due to a security breach
• 30% loss of clients happens when an organisation suffers reputational damage due to a breach

Therefore, every organisation should understand the importance of information security to preserve their business reputation as well as keep their revenues unaffected.

The next section shares the main reasons to have a sound information security management system to maintain your organisation’s reputation.

Cyber Security Breaches are Rising

Over recent years, there has been an enormous rise in the instances of cybercrimes, fraudulent activities, data infiltration, and information security violations. This is mainly due to the rapidly evolving technologies and increased use of IT devices and digital systems by organisations. Online information exchange, cloud data storage, as well as online deals and transactions are making businesses the soft targets of cybercriminals or hackers. Despite advanced security measures in many organisations, the hackers can infringe because they consistently refine their skills and techniques of attacking. Therefore, against this backdrop of rising cyber security issues, organisations of all types or sizes should demonstrate their robust information security management to guard their vital information assets. This will help them to maintain the trust of customers and other stakeholders in their business.

Legal Consequences Can Arise

Certain data protection laws and privacy regulations apply to organisations in all countries. Therefore, you need to comply with those to ensure that all your data are effectively stored and managed. Hence, if there is an accidental compromise or leakage of the data, it means that your organisation has failed to meet the applicable security regulations and guidelines. This can get your organisation into legal trouble such as fines, court trials, and regulatory sanctions. Any legal actions against a business can permanently tamper its hard-earned reputation. Therefore, information security management is also vital to prevent legal consequences of data breaches.

Economic Costs of Cyber Security Attack

Apart from reputational damage, the huge financial or economic losses arising from cyber breaches make information security a primary management aspect for businesses. Direct losses arise from:

• Theft of sensitive corporate information (company’s intellectual property assets, trade secrets, etc.)
• Leak of financial information including bank details, payment card information
• Disruption of trade due to failure of online transactions
• Discontinuation of the business contracts or withdrawal of clients and investors

Key Takeaway

By putting out the real facts and figures, we tried to explain the inherent link between information security and business reputation. While security breaches and cybercrimes are on rise, organisations need to consider implementing effective measures for information security to defend their valuable data and information. Security breaches can tarnish the reputation of even the most successful businesses and blow up the confidence of their long-term customers. Hence, to make your organisation resilient against cyberattacks, get an information security management system (ISMS) that promotes best practices across your organisation and makes your employees responsible for the practices.

If your organisation still does not have any dedicated ISMS, contact our team of expert ISO management consultants at Compliancehelp. They can help you develop and implement the correct ISMS in accordance with your information security issues and challenges. Feel free to contact us!