Dark Reading is part of the Informa Tech Division of Informa PLC

This site is operated by a business or businesses owned by Informa PLC and all copyright resides with them.Informa PLC's registered office is 5 Howick Place, London SW1P 1WG. Registered in England and Wales. Number 8860726.

Risk

12/7/2016
12:40 PM
Connect Directly
Twitter
LinkedIn
RSS
E-Mail
50%
50%

Corporations Cite Reputational Damage As Biggest Cyber Risk

New data analyzing SEC disclosures found 83% of publicly traded companies worry most about the risk of brand damage via hacks exposing customer or employee information.

Public businesses fear the possibility of losing customer or employee's personally identifiable information (PII) and the subsequent brand-damage fallout more so than other risks, a new study published by the International Association of Privacy Professionals (IAPP) found. 

The IAPP Westin Research Center studied US Securities and Exchange Commission (SEC) Form 10-K disclosure statements from more than 100 publicly traded companies. The forms are where businesses share risk factors that could prove concerning to investors. 

The chief privacy officers, chief legal counsel, and other experts in privacy and privacy law on IAPP's research advisory board were struggling to quantify privacy risk for their companies and clients. IAPP decided to study this via the SEC disclosures, according to IAPP research director Rita Heimes.

"It's tough to come up with a value for privacy risk," she explains. "We decided to determine whether companies think [privacy] is a risk to the bottom line, and provide more definition that way."

Among the companies that disclosed privacy risk, 83% cited reputational harm as the top digital risk factor. This surpassed civil litigation (60%), regulatory enforcement (51%), and remediation (50%). Less than half (43%) cited the risk of failing to comply with privacy laws and regulations.

Brand damage causes more immediate damage than lawsuits, which can drag on for long periods of time.

"Trust is the biggest threat because it applies to both the employee and the customer, depending on whose data is being misused or exposed," Heimes says. "Once that trust factor is undermined, it can have a ripple effect, leading to financial harm, embarrassment, or drop in employee retention."

Another risk factor is loss of corporate resources, Heimes continues. Anytime someone mishandles personal data, it takes a lot of time away from business operations and as a result, employees have to work on planning recovery and preventing future incidents.

One in five companies warns investors that if it becomes the victim of a data breach, the liability could exceed insurance coverage. The same amount say an attack could distract management, and other employees, from their core business responsibilities.

The fear of privacy risk varies across industries, says Heimes. Businesses offering products known for being secure, like software, operating systems or cloud services, run a tremendous risk if personal information is lost.

"If their products are vulnerable to attack and data can be easily mishandled, that makes the product or service inherently less valuable," she explains. "We perceived technology companies and social media platforms as being far more likely to write elaborate, sophisticated, and knowledgeable privacy disclosures" compared with organizations like energy companies, which are more concerned with system failure.

Heimes says she was surprised there wasn't greater unease about the role of vendors and other third parties in using PII. Less than half (47%) of respondents were concerned about information mishandling by business partners, vendors, and other organizations.

"There was less mention of third parties disclosing data than I think is reflective of reality," she notes. "This is significant and many companies have begun to step up paying attention to how vendors handle their data."

That is likely to change over time, however, she notes.

There are steps businesses can take to mitigate the risk of information loss, she says. It's not enough to simply buy software tools; the human factor is most important.

Investing in people and helping them understand privacy best practices can prevent the misuse of PII. The workers who collect, store, and make decisions about how to handle user data need to be aware of privacy issues and make informed choices, Heimes says.

Related Content:

Kelly Sheridan is the Staff Editor at Dark Reading, where she focuses on cybersecurity news and analysis. She is a business technology journalist who previously reported for InformationWeek, where she covered Microsoft, and Insurance & Technology, where she covered financial ... View Full Bio
 

Recommended Reading:

Comment  | 
Print  | 
More Insights
Comments
Newest First  |  Oldest First  |  Threaded View
News
FluBot Malware's Rapid Spread May Soon Hit US Phones
Kelly Sheridan, Staff Editor, Dark Reading,  4/28/2021
Slideshows
7 Modern-Day Cybersecurity Realities
Steve Zurier, Contributing Writer,  4/30/2021
Commentary
How to Secure Employees' Home Wi-Fi Networks
Bert Kashyap, CEO and Co-Founder at SecureW2,  4/28/2021
Register for Dark Reading Newsletters
White Papers
Video
Cartoon Contest
Current Issue
2021 Top Enterprise IT Trends
We've identified the key trends that are poised to impact the IT landscape in 2021. Find out why they're important and how they will affect you today!
Flash Poll
How Enterprises are Developing Secure Applications
How Enterprises are Developing Secure Applications
Recent breaches of third-party apps are driving many organizations to think harder about the security of their off-the-shelf software as they continue to move left in secure software development practices.
Twitter Feed
Dark Reading - Bug Report
Bug Report
Enterprise Vulnerabilities
From DHS/US-CERT's National Vulnerability Database
CVE-2020-36124
PUBLISHED: 2021-05-07
Pax Technology PAXSTORE v7.0.8_20200511171508 and lower is affected by XML External Entity (XXE) injection. An authenticated attacker can compromise the private keys of a JWT token and reuse them to manipulate the access tokens to access the platform as any desired user (clients and administrators).
CVE-2020-36125
PUBLISHED: 2021-05-07
Pax Technology PAXSTORE v7.0.8_20200511171508 and lower is affected by incorrect access control where password revalidation in sensitive operations can be bypassed remotely by an authenticated attacker through requesting the endpoint directly.
CVE-2020-36126
PUBLISHED: 2021-05-07
Pax Technology PAXSTORE v7.0.8_20200511171508 and lower is affected by incorrect access control that can lead to remote privilege escalation. PAXSTORE marketplace endpoints allow an authenticated user to read and write data not owned by them, including third-party users, application and payment term...
CVE-2020-36127
PUBLISHED: 2021-05-07
Pax Technology PAXSTORE v7.0.8_20200511171508 and lower is affected by an information disclosure vulnerability. Through the PUK signature functionality, an administrator will not have access to the current p12 certificate and password. When accessing this functionality, the administrator has the opt...
CVE-2020-36128
PUBLISHED: 2021-05-07
Pax Technology PAXSTORE v7.0.8_20200511171508 and lower is affected by a token spoofing vulnerability. Each payment terminal has a session token (called X-Terminal-Token) to access the marketplace. This allows the store to identify the terminal and make available the applications distributed by its ...