The real cost of a security breach to your business is larger than many imagine. On the surface there is incredible expensive to recovering from breaches. What is often also at risk is the inestimable damage to company morale, brand reputation, and operations. While some estimations are easy to comprehend when running a simulation, there are often far more factors that businesses don’t add into the tally when allocating budget or resources to security.

This article is a detailed accounting of the hidden costs of an attack to your organization should pay attention to. 

The Not-so Hidden Costs of Breaches

Given the exorbitant costs of a breach, bolstering security ahead of time is a pretty cost-effective strategy. 

“Globally, the impact of a data breach on an organization averages $3.86 million, though more serious ‘mega breaches’ can cost hundreds of millions of dollars.”


When thinking about what you’ll need to spend to prevent or recover from breaches, the costs can be considered around two areas. First, there are the hard costs of establishing a defense. Next, the costs in resourcesfor maintaining security. 

The Cost of Attack Prevention

When determining the costs of prevention, the straightforward costs are in your tools. These may appear “handled” after you purchase security solutions. However, many solutions only solve for certain threats or operate for particular infrastructures. For example, your traditional WAF may not function well in a cloud environment, protecting your perimeter but not monitoring API-level traffic. Or, your solution may not test effectively if it doesn’t integrate with your dev cycles. 

As the threat landscape matures, your tools will also have to adapt. Budget for periodic updates and perform audits proactively. Adding a level of security, look for tools that will scale with your business, using autoscaling, AI, and/or machine learning. After initial costs, figure in how often you are going to have to replace purchased solutions versus a third-party service or tools. Thinking ahead is part of pulling together a complete picture.

The Cost of the Threat of Cybersecurity

Admittedly, this figure is difficult to quantify. What we are referring to here is the impact on workplace productivity by diverting employees’ attention and resources away from their primary role and into cybersecurity awareness and best practices. An example here could be regularly updating passwords, or automatically being logged out of accounts on a regular basis to re-authenticate. How much do these practices impact the completion of tasks within the company? 

A cost-savvy consideration that doesn’t come with the sacrifice of good security is figuring in how often you’ll have to update or maintain solutions. Heavy admin can make solutions unwieldy or eat up manpower. Automated solutions help security testing and protection remain as continuous as your operations. They also enable security teams to focus on more important tasks. 

The Cost of Attack Recover vs. Prevention

The obvious costs that add up after a breach are first in the very real awareness you’ll have that you should have spent the money on a good defense in the first place. So, you’ll have to audit your security landscape and invest in prevention. There are a lot of different ways to protect your data, though few one-size-fits-all solutions fit any company perfectly. Look for a custom fit security toolset. Either using in-house or external experts, spend the time and money to be protected.

Next, consider the costs of repairing your relationships with customers. While litigation could occur, you also have to consider the costs of trust-rebuilding campaigns and loss of revenue from a weakened customer base. 

The Hidden Costs of Breaches

A Culture of Distrust

The lingering fear and new policies that come in the aftermath of a security breach can put a lot of pressure on employees. Obviously the source of the breach has to be found and fixed, which can, unfortunately, result in both intentional and unintentional witch hunts by organizations. The high monetary costs of breaches often result in the loss of employees. This creates a stressful, untrusting culture within a company that will impact employee motivation and reduce productivity.

lowered brand trust and company morale can cost in sales and retention of good talent
Lowered brand trust and company morale can cost in sales, marketing and retention of good talent.

This internal search for any potential threats takes a lot of time. Firstly executives that have to undertake the review. Secondly, if an employee is being looked at, their time is also impacted and they are distracted from their primary role.

The important consideration here is that since everyone’s guard is up, workplace trust is irreversibly damaged. Consider carefully if you have to undertake these internal reviews and what their impact could be on your company’s culture.

Operational Costs of an Attack

When a data breach has been discovered, an organization’s reaction is often to immediately focus on defining the extent of the attack and how much damage has been inflicted. During this time, there is usually a disruption in some form to the normal operations, beyond which were outlined in the previous point. This disruption inevitably has financial implications. The amount will depend on the scale of the disruption and the damage that needs to be repaired.

As an example, an e-commerce business might have to shut down their website during the investigation because until the source of the attack is found and the weakness repaired, the company is at risk of a second round of attacks. Further, it is likely that large sections, if not all, of the IT department are likely to be diverted onto this new priority, meaning all work relying on their implementation will get pushed down the list of tasks.

Cost of a Breach to Your Brand

For some organizations, their brand is the key, number one selling point. If the values that are attributed to the brand are suddenly undermined, this could have a serious impact on revenue. For example, would a buyer go to an online security firm that had just had its website and social media hacked? Some malicious attackers have also been known to post derogatory or politically extreme updates to websites. If a potential customer were to see these updates, without realizing a company’s website has been compromised, there is a large chance that a person is not going to buy or return in the future. A further example is if you have confidential or sensitive information stored about your customers, if this is compromised, the level of trust between your organization and your customer base will take a further hit.

The devaluation of your brand is a vital consideration when considering the hidden costs of security breaches. This is particularly so for small to medium-sized businesses where brand values are not as well established and have fewer resources to allocate to branding than a larger, big business.

What is the value of your data to you?

This is a question that takes careful consideration. Particularly so if you try and remove bias towards the importance of the work you are conducting. Having your data stolen is a horrible experience, there’s no doubt about that. While this personal data is extremely important to the individual, in most cases this data has little value to other people.

Data privacy value to business and consumer trust
The value you place in your data is, by extension, the value you place on the related business and customer costs if that data is breached.

The threat from criminals comes from the amount of value you hold in the data, not what you think it can be sold for. This ransoming is one of the most common forms of income for online criminal organizations. Ransomware is not “we are coming for your data because we value it”. Instead, it’s, “we are coming for your data because you value it”.

When evaluating the hidden costs, you shouldn’t think about what the value of your data is to others. You should think about the value of your data to you. Hackers these days are application-agnostic. They don’t care about how important the data is that they’re hacking. They only care about how important the data is to you, and how much you’ll pay for it.

Reading this article you may have noticed that the themes we’ve outlaid here aren’t as straightforward as adding up the amount of cash that has been stolen. You have to understand the processes of your business and the way it operates. From there you can begin to unpack the intricacies of a potential attack for its impact on your customers and personnel.

This article was contributed by TRG Datacenters, the first data center to make colocation easy, fast, and reliable.