Security breaches can be scary. That's not news. However, new data suggests just how scary they can be, and the results are pretty startling.
While no organization wants to ever suffer a breach, they happen from time to time. And even when they do occur, some organizations will simply go on conducting business the way they always have, assuming that a breach won't result in theft or fraud. That, however, is extremely flawed thinking.
A study conducted by Javelin Strategy & Research found that 28 percent of breached individuals will later become victims of identity fraud. Consider an organization processing 1 million customer transactions. If its servers are breached, it won't be a handful of customers who suffer. The number will be closer to 300,000.
Al Pascual, the lead researcher behind the study, stressed in a report just how big of a number that is and implored companies to take extreme measures to protect data security.
"The correlation of being notified of a data breach and actually suffering a certain type of fraud is very, very strong," Pascual said. "If you receive notification that your credit card number has been breached, the incidence rate for that particular population is 28 percent, when we talk about existing credit card fraud."
Businesses must do whatever they can to prevent breaches from affecting the safety of customer information, particularly those processing B2B payments. Companies won't want to do business with vendors that compromised their information, so not only will a breach hurt a merchant's loyal customers, it could irreparably damage its reputation.
Tokenization is an ideal solution for vendors because it will keep information offsite and away from targeted attacks. If an internal system is breached, data will not be at risk. This will help keep customers happy and help merchants maintain PCI compliance.