Experts Warn of Heightened Data Security Risks as Economic Crisis Continues

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Tightening budgets are causing some companies to cut back on data security measures, even though the personal information of customers and employees is at increased risk.

Historically, some businesses have rolled the dice in terms of data security, because they didn't fully grasp the stakes - both financial and reputational - that a data breach poses

The economic crisis presents new data security risks for businesses worldwide, yet many are cutting back on protective measures due to tightening budgets, according to data security experts from Kroll's Fraud Solutions practice. The irony, advises Kroll, is that it's more important than ever for businesses to stay committed to the incident response plans and security measures needed to protect sensitive data.

"Historically, some businesses have rolled the dice in terms of data security, because they didn't fully grasp the stakes - both financial and reputational - that a data breach poses," said Chief Operating Officer Brian Lapidus. "Today, however, organizations have an increased understanding of the data security risks, but still may choose to overlook those risks in light of the harsh financial realities."

A variety of factors stemming from the current economic conditions have contributed to the heightened data breach risks:

  • Rise in general crime: A weakened economy means fewer legitimate opportunities to generate revenue. This unfortunate fact has pushed many individuals and organizations alike to seek less legitimate means of making a buck. How will this trend impact the business world?
  • Mergers and acquisitions: Any merger involves the acquisition of new systems - a process that presents a new set of security challenges for the acquiring organization. How can an organization account for data that it has yet to examine?
  • Layoffs: News of layoffs can greatly impact employee morale and sentiment toward an organization. How can businesses best manage access to sensitive data and ensure its protection, even among existing employees?
  • Outsourcing: In a time of mass layoffs, more companies are outsourcing projects they might have otherwise managed in-house. How should an organization monitor and control the data security practices of its vendors and partner organizations?
  • Business closures: In the unfortunate event of bankruptcy, what happens to the data previously stored by organizations?
  • Tightening budgets: When it comes to cutting budgets, where does data security in an organization's priority list?

"The cost of a data breach is rising rapidly, Lapidus said. "And I don't mean just the hard costs of notifying affected individuals, but also the serious impact on productivity, customer confidence, and the organization's brand. These are setbacks that companies can't afford at any time - much less in an economic crisis."

For more information on best practices in data security, including actionable tips on confronting today's rising data security risks, read Lapidus' article "Top 10 Tips for Businesses: A Guide to Data Breach Prevention and Response," or visit Kroll's identity theft resources and links.

About Kroll
Kroll, the world's leading risk consulting company, provides a broad range of investigative, intelligence, financial, security and technology services to help clients reduce risks, solve problems and capitalize on opportunities. Kroll Inc. is a wholly-owned subsidiary of Marsh & McLennan Companies, Inc. (NYSE: MMC), the global professional services firm. Kroll began providing identity theft solutions in 1999 and created its Fraud Solutions practice in 2002 in response to increasing requests from clients for counsel and services associated with the loss of sensitive personal information, and related identity protection and restoration issues facing organizations and individuals. Since then, Kroll's Fraud Solutions clients have included Fortune 500 companies, non-profit organizations, and government entities dealing with healthcare, financial services, insurance, consumer service, and any activity involving the collection and use of personal information. Kroll's Fraud Solutions team presently serves over 10,000 businesses and millions of individual consumers. For more information, visit: http://www.krollfraudsolutions.com.

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Emilie Moghadam
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