After a data breach is disclosed, stock prices fall an average of 5%

Data security breaches can negatively impact an entire organization – including sales, marketing and IT – and have a significant negative impact on company finances and shareholder value, according to a new Ponemon research study.

Specifically, the study found that the stock value index of 113 companies declined an average of five percent the day the breach was disclosed and experienced up to a seven percent customer churn. What’s more, thirty-one percent of consumers impacted by a breach stated they discontinued their relationship with an organization that experienced a data breach.

While the study found a data breach has a significant impact on brand reputation, a surprising 66 percent of IT practitioners don’t believe their company’s brand is their responsibility.

“Data breaches are very real business and bottom line concerns. This reality was recently seen when a popular fast food chain’s stock rose as much as 6.8% after reporting better than expected Q1 earnings, but then saw its gains chopped in half when it revealed it had a breach. The fallout can be significant and may even be a reason to relieve the C-Suite of its duties,” said Tom Kemp, CEO of Centrify.

Read full news article on Help Net Security