Do you know just how much unencrypted data or an information breach can cost your business?? It’s quite scary to think about, actually. If your company were to be the unfortunate victim of a security breach, you could be looking at losing huge amounts of data, negative exposure, huge financial losses, and productivity decreases. Let me explain the degree to which your company would suffer.

In 2001, the Computer Security Institute, along with the FBI, questioned security experts from a variety of corporations, government agencies, financial institutions and universities. Of those surveyed, 85% had dealt with security breaches of unencrypted data within the previous year, and 64% had experienced financial losses as a result. The following year those statistics increased to 90% and 80%, respectively. How much did those losses cost the companies? In 2002, those who could quantify their losses reported a total of nearly $456 million lost! What’s even more frightening? 74% said that internet connections were the cause of most attacks.

Let’s take an example. AT&T and Verizon both experienced information breaches. Outsiders were able to see confidential customer information, such as credit card, drivers’ licenses, and social security numbers. They then went on to post these numbers in public chat rooms online!

Another company had as many as 8 million credit card numbers stolen as a result of its online transactions in 2003!

I could go on and on. Unencrypted data leakage is not special to big corporations, either. All businesses “big, small, and midsize” are at risk of unencrypted data being seen by unwanted eyes. Whether the information is in transit from company to company, or at rest on servers, your company data is susceptible to these threats.

The companies who suffer a security breach of unencrypted data also risk the trust of their customers who may begin to question the security of the company and look elsewhere to do their business. A hacking attack or virus can cost a business up to several days to fix the problem, during which time customers are unable to access the company’s Web-based services. And we’ve probably all experienced a phishing attack, when we receive a fake email greatly resembling a financial institution’s website asking for our banking details. Because of these, as much as 75% of bank account holders are less likely to respond to emails from their banks. Research also shows that 74% of account holders are also afraid to shop online in fear of a phishing attack.

So you may think: well I’m a small business, unencrypted data won’t cost me much. Think again. A private study by the Ponemon Institute in Tucson found that a single data breach can cost from $5 million to $50 million and averages $140 per lost customer record. A company also loses between 0.63% and 2.1% in its stock price value when a data breach is reported.

To see just how much your company is at risk to lose, pull out your calculator. According to The Aberdeen Group security incidents cost a median amount of .067% of the businesses’ yearly revenue. How much is that to you?

But you can rest assured. While completely eliminating the chances of a security breach isn’t possible, there are many measures you can take to greatly reduce these chances. First and foremost is that if your business cannot handle its IT security and encryption services on its own, you should outsource it to a company that can. We all know that prevention is the best medicine, so you ensure the security of your business and have a plan in case the worst happens.