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Why Data Security Matters for Your Business

Why Data Security Matters for Your Business

Whether we like it or not, companies will always need to collect data. Often, the data collected can be private or sensitive, which means that it needs to be protected. When customers hand over information (personal, financial and otherwise) - they expect your business to protect it. That means using the most up-to-date data security technology and techniques. 

A data breach can have disastrous consequences, including significant financial losses, permanent reputational harm, and a decline in customer trust. It is no longer a question of discussing IF data security is necessary; instead, the emphasis is on HOW to best provide that protection.  

It’s important to point out that data security is not just about protecting information; it's a comprehensive strategy that protects the integrity of your business on all fronts. By investing in robust data security measures, you can protect yourself from potential threats, ensuring your longevity and long term business success.




Why data security matters

Why is data security important, and why should it be taken seriously?


  1. Protecting sensitive information

    Imagine the damage that could be done if someone with bad intentions got their hands on your customers' personal information, employee information, and/or financial records. Never mind the reputational damage your business would suffer - identity theft and financial crimes are a very real threat. Implementing an antivirus scanner can help greatly to secure your data. 

  2. Compliance with regulations

    Industry and data security regulations are in place for a reason. Failure to comply with these regulations can result in some hefty legal and financial implications.

  3. Preservation of Intellectual Property

    Intellectual property is an important asset for many businesses, and it often includes valuable trade secrets. Keeping them secure is essential to maintain a competitive advantage in the market

  4. Avoiding financial losses

    Legal payments, damage management costs, and the strengthening of security protocols are all part of the cost of repairing the damage caused by a breach. Not to mention the cost of lost business and a tarnished brand.

  5. Reputational damage and trust erosionWhy-Data-Security-Matters-for-Your-Business_internal-graphic

    Trust is the bedrock of successful business relationships. If sensitive information is exposed, trust can be shattered in an instant. Customers and/or partners might decide to do business elsewhere if they do not trust your business.

  6. Business Interruptions

    The disruption of a breach is not to be underestimated. Day-to-day operations may be severely disrupted by a data breach - meaning lower productivity and higher costs. 


Best practices for strong security

Let’s take a look at some of the best practices for maintaining good data security:

  1. Develop a comprehensive security policy

    A robust security policy is the foundation of quality data security. It should clearly outline procedures for data protection, access control, password management, and incident response. Regularly review and update the policy to reflect emerging threats, changes in technology or regulation changes.

  2. Train employees on security protocol

    Your staff are on the ‘front line’ of data security and play a major role in helping you to maintain a tight ship. Ensuring they have had comprehensive training on security protocols is essential.

    Employees need to know how to:
       - Handle sensitive data securely
       - Recognise and report potential threats such as phishing attempts
       - Understand the importance of adhering to security policies

    This is also not a set-and-forget exercise, regularly reinforce training through ongoing awareness programs.

  3. Keep software up-to-date

    Outdated software and operating systems are more vulnerable to security breaches. Regularly update all software, including operating systems, applications, and security tools, with the latest patches and upgrades.

  4. Use multi-factor authentication (MFA)

    Implementing MFA adds an extra layer of security to the authentication process. Reduce the risk of a data breach by requiring users to provide multiple forms of authentication when accessing systems and software.

  5. Have a *good* backup

    Having an up-to-date copy of your systems and data in a secure and geographically distributed location is good practice. Having this would allow you to face a cyber-attack, natural disaster, or system failure with relative ease. Training on how to fail over to that data, along with periodic testing of the failover process is also recommended.

  6. Implement Audit Trails

    Audit trails are a detailed record of activity and changes made to the system or applications data. Having this type of information available allows you to protect your business in a number of ways including, detecting and preventing fraud, proving compliance, aiding investigations and enhancing your risk management.

  7. Limit access to sensitive data

    Not everyone needs access to ALL the information. Only grant access to the team members who need it. Implement role-based access controls which are reviewed regularly.

  8. Enforce a robust password policy

    Staff have a variety of accounts for various tools and platforms that your business makes use of.  Having a robust password policy in place adds another layer of security to protect that data.

  9. Perform regular security audits

    This helps to identify potential vulnerabilities and ensures compliance with established security protocols. Things like penetration testing, vulnerability assessments, and security audits help to identify weak points. 

By following these best practices, businesses can significantly reduce the risk of a data breach and safeguard sensitive information.  Read here for tips on how to reduce business data risk & increase data security & compliance.


13 Questions for a Comprehensive Password Audit


Some real-world examples

Highlighting 2 real-world examples of when security went  wildly wrong helps to firm up some of the abstract concepts discussed above. For each example we will look at the problem that occurred, the consequences that were faced and then also take a look at what each company should have done, so that these issues do not repeat themselves.


1. Yahoo

The issue

In 2013 and 2014, Yahoo experienced two separate data breaches that compromised the personal information of billions of its users.

The first breach, disclosed in 2016, affected approximately 500 million user accounts. It involved unauthorised access to sensitive user information, including names, email addresses, telephone numbers, and hashed passwords.

However, the impact of the first breach was overshadowed by an even larger and more damaging incident - the largest data breach on record.

In 2017, Yahoo revealed that it had experienced another massive breach in 2014, which had compromised the personal information of approximately 3 billion user accounts. This breach included names, email addresses, telephone numbers, dates of birth, hashed passwords, and in some cases, security questions and answers.

The consequences

The Yahoo breaches had severe consequences for the company:

  • Declining User Trust: The breaches eroded user trust in Yahoo's ability to protect their personal information, resulting in a loss of users and significant damage to the company's reputation.
  • Regulatory and Legal implications: Yahoo faced regulatory investigations by the United States Congress and numerous lawsuits, leading to significant financial and legal consequences.
  • Repercussions in Mergers and Acquisitions: The breaches impacted Yahoo's acquisition deal with Verizon Communications, leading to a renegotiation of the acquisition price by around $350 million.
  • Backlash for Delayed Disclosure and Communication: Yahoo faced criticism for the delayed disclosure and lack of transparent communication, further damaging its reputation and trust among stakeholders.
These consequences underscore the importance of prioritising data security, implementing robust security measures, regularly auditing and updating protocols, and maintaining open and transparent communication with users in the event of a data breach
How can these issues be avoided?
  • Robust Security Infrastructure: Implementing a strong security infrastructure that includes up-to-date firewalls, intrusion detection systems, and encryption mechanisms can help safeguard sensitive user data.
  • Regular Security Audits: Conducting regular security audits and vulnerability assessments can identify potential weaknesses and address them before they can be exploited by attackers.
  • Prompt Patch Management: Ensuring timely application of security patches and updates helps protect against known vulnerabilities and strengthens the overall security posture.


2. Ubiquiti


The issue

Ubiquiti Networks is a technology company that specialises in wireless data communication products. In 2021, the company disclosed that it had experienced a significant data breach resulting from an employee falling prey to a phishing scam.

According to the company's announcement, an attacker posed as an executive within the organisation and sent an email to an employee requesting the change of their account credentials.

The employee, believing the email to be genuine, provided the requested information, unknowingly granting the attacker access to the executives account.

Through this compromised account, the attacker gained unauthorised access to Ubiquiti's IT systems, including customer data. The breach potentially exposed sensitive customer information, such as names, email addresses, hashed passwords, and IP addresses.

The consequences
  • Damage to Reputation: The incident raised concerns about the company's commitment to data security, damaging its reputation among customers, partners, and stakeholders.
  • Customer Trust Erosion: Particularly due to delayed disclosure and a lack of transparent communication.
  • Regulatory Scrutiny: This led to investigations, penalties, and increased regulatory oversight.
  • Financial Implications: Remediation costs, legal fees, and lawsuits stemming from the breach imposed financial burdens on the company. In this case the estimated loss was around $39 million
  • Operational Disruption: Addressing the breach and its aftermath required significant resources and diverted the company's focus from its core operations.

The significance of both the technological and human aspects of data security is highlighted by this example. Constant education, assistance, and training can aid in preventing issues that are produced by people. This might also have been avoided by implementing strong technical security. Let's now examine in greater detail what businesses can do to prevent such problems:

How can these issues be avoided?
  • Employee Education and Awareness: Regularly educate employees about different types of phishing attacks, how to identify suspicious emails, and the importance of verifying requests for sensitive information.
  • Multi-Factor Authentication (MFA): Implement MFA for all accounts, including email and critical systems, to provide an additional layer of security.
  • Security Incident Response Plan: Develop and regularly update an incident response plan that outlines the steps to be taken in the event of a security incident, including immediate actions to contain and mitigate the impact.
  • Email Security Measures: Deploy robust email security tools that use advanced filtering techniques to detect and block phishing emails before they reach employees' inboxes. 


The cases of Yahoo and Ubiquiti Networks demonstrate why, in the current digital environment, data security should be an essential focus for businesses. Such events serve as cautionary tales, emphasising the consequences of inadequate data security procedures.



Data security matters for your business because it directly impacts your reputation, customer trust, and financial stability. A data breach can lead to loss of customers, regulatory penalties, and costly legal consequences. It disrupts operations, consumes resources, and undermines the integrity of your brand.

By prioritising data security, your business can instil confidence among customers, partners, and stakeholders. Implementing best practices such as robust security infrastructure, regular audits, employee education, incident response plans, and transparent communication helps mitigate the risks and impacts of data breaches.

Data security is an investment in the long-term success of your company. It is a proactive method of preserving customer confidence, securing sensitive data, and defending your brand's reputation. 

Set data security as a top priority today to ensure the resilience and security of your business.


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About Author

Abdullah Osman
Abdullah Osman

I am a postgraduate mechanical engineer turned software engineer who enjoys writing because I believe that the way we communicate plays a defining role in who we become. I wrote this blog while watching Teen Titans Go and Listening to Jon Bellion.

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