Consumer data is currency. In the digital world, it drives advertising, purchases, and decision-making for businesses and consumers alike. Plus, it holds unique value in identifying consumers and their personal accounts. As our reliance on technology continues to grow, so does the concern for protecting our sensitive information from malicious actors.
What is a data breach?
A data breach is the unauthorized access to and acquisition of personal or corporate data, and is one of the most pressing threats to our digital security. A rapid progression of technology has fueled its evolution, as both attackers and defenders continually adapt their strategies and tools in an escalating digital arms race.
Data breaches are an alarming and persistent threat to the security and privacy of individuals and organizations alike—and they can happen to all levels of organizations. Data warehouses, web service providers, individual emails, and more are all vulnerable to cyber attacks, but some have more serious and detrimental consequences than others.
Fortunately, emerging technologies, such as consumer-permissioned data, have emerged as powerful tools in the fight against cyber threats. These advancements not only protect our data and act as an alternative to data warehouses, but also empower individuals to have greater control over their own information.
Examples of data breaches
In 2013 (and again in 2014), Yahoo was exposed to hackers and left all 3 billion users vulnerable to have their personal information including email accounts and passwords, birthdates, and more stolen.
In 2017, a breach in Equifax’s data warehouse exposed the sensitive personal information, including social security numbers, of approximately 147 million individuals. It served as a wake-up call for the vulnerability of large corporations and underscored the potential for devastating consequences when data is compromised on such a massive scale.
Even more recently in July 2023, National Student Clearinghouse announced that sensitive student records and personal information had been compromised, forcing the organization to notify the many colleges impacted by the breach and proving that all types of consumer data are susceptible to cybersecurity threats.
The magnitude of these breaches cannot be overstated: the sheer number of people affected underscores the extensive reach and potential harm caused by these types of breaches. And that’s why hackers hone in on large-scale organizations— the vast amount of consumer data they can poach and hold ransom for nefarious reasons.
What causes data breaches?
Data breaches often stem from a combination of factors, exploiting weaknesses in systems, processes, and human behavior. For organizations, businesses, and data warehouses, this can include:
- Inadequate security measures: Insufficient investment in robust cybersecurity measures, such as outdated software, weak access controls, or inadequate encryption protocols, can leave organizations exposed to breaches.
- Unpatched software: Failure to promptly apply security patches and updates leaves systems susceptible to known vulnerabilities that attackers can exploit.
- Insider threats: Malicious insiders or negligent employees who have access to sensitive data can intentionally or inadvertently facilitate breaches.
- Social engineering: Hackers employ sophisticated social engineering techniques, such as phishing, spear-phishing, and pretexting, to manipulate individuals into divulging sensitive information or granting unauthorized access.
- Third-party vulnerabilities: Organizations relying on third-party vendors or partners may face breaches through vulnerabilities in their systems or supply chains, highlighting the importance of robust vendor management and due diligence.
Hackers lean on these weaknesses to do their work. Even as technology advances, they adapt their tactics, using emerging trends and techniques to their advantage to exploit vulnerabilities. Unfortunately, consumers and the businesses who are breached fall victim to those tactics and face devastating consequences.
Facing the 5 major consequences of data breaches
The impact of data breaches is severe. For consumers, the effects are obvious: Data breaches expose highly sensitive personal information, including names, addresses, social security numbers, email addresses, and passwords. This data, when in the wrong hands, can lead to identity theft, financial fraud, and other forms of cybercrime. The breach of such personal information erodes the simple idea of data privacy, leaving individuals vulnerable to a range of detrimental consequences.
For businesses, data warehouses, and other organizations that hold consumer data, the consequences are more complex:
1. Financial implications
The fallout from a breach can include legal liabilities, regulatory penalties, reputational damage, loss of customer trust, and a subsequent decline in revenue for businesses.
2. Reputational damage
There is a lasting impact on the reputation of affected organizations who face data breaches. High-profile breaches, like aforementioned Equifax and Yahoo, often receive extensive media coverage, leading to public scrutiny and a loss of trust among customers and stakeholders. Rebuilding a tarnished reputation can be a challenging and costly endeavor, potentially resulting in long-term financial consequences.
3. Regulatory and legal ramifications
Data breaches often trigger regulatory investigations and legal proceedings. Organizations may face fines, penalties, and lawsuits due to negligence in protecting customer data or violating privacy regulations. The aftermath of these breaches can result in increased scrutiny and stricter data protection requirements imposed by regulatory authorities.
4. Erosion of public and consumer trust
Data breaches erode public trust in the ability of organizations to safeguard personal information. When high-profile breaches occur, individuals may become more cautious about sharing personal data, hindering the development of personalized services and the full potential of the digital economy. Restoring public trust is crucial to ensure the continued growth and innovation in the digital realm.
5. Catalyst for cybersecurity improvements and alternatives
Often, data breaches serve as wake-up calls for organizations and individuals to prioritize cybersecurity measures. Major breaches often prompt industry-wide discussions, leading to increased investment in security technologies, more stringent data protection protocols, and improved cybersecurity practices. The lessons learned from these breaches contribute to the development of stronger defenses against future attacks.
How to prevent data breaches
While a significant aspect to cyber security includes comprehensive education and training for employees and individuals on best practices for data protection as well as strengthening legal frameworks and regulations is essential to ensure accountability and protect individuals' privacy rights, technology plays a crucial role in bolstering cybersecurity and implementing robust security measures. Leaning on advanced encryption, data masking, firewalls, and mandatory multi-factor authentication (MFA) for their users, businesses are taking advantage of multi-channel technologies to protect themselves and their users. Businesses and consumers are also learning to embrace credentialed, or consumer-permissioned, data.
The benefit of consumer-permissioned data for businesses and consumers
Consumer-permissioned data empowers individuals to provide secure access to existing data stored in online databases or grant consent to provide direct access to their online accounts through platforms like MeasureOne. These platforms make it easy to start using this permissioned data. So how does it work?
- A business requests consumer data: The business asks the consumer to share specific personal data (any data found on the consumer’s online account or portal)
- The consumer gives permission and access to their data: The consumer securely shares their login credentials for their online account with the CPD platform.
- The CPD platform accesses the data: Once connected to the consumer account, the CPD platform uses specifically created APIs to pull the permissioned data.
- The CPD platform provides the consented data to the requesting business: Only the necessary information is extracted and shared.
Investing in this technology fosters a more secure data ecosystem, where data is protected with robust encryption techniques, access controls, and consent management mechanisms, enhancing the overall cybersecurity posture.
For businesses, using consumer-permissioned data doesn’t only facilitate consumer trust, it also provides:
- Better coverage and advanced scalability: consumer-permissioned data allows businesses to take data directly from the source without relying on the need for third-party partnerships (or sourcing more).
- Cost-effective data requests: Because there are no middlemen (i.e. third-parties and other data sources), the costs per data request and doc gathering decrease.
- Fresh data every time: By gathering data from the source directly, there are nearly never data quality issues. You get reliable and accurate data for any data pull.
- Improved operations and better decision-making: By linking to consumers’ accounts directly, businesses can quickly verify necessary consumer data without sifting through superfluous documentation, leading to quicker approvals, underwriting, and more.
Introducing MeasureOne’s secure CPD platform
MeasureOne is the industry-leading consumer-permissioned data platform ready to instantly provide accurate and secure consumer data to businesses. We prioritize security, taking advantage of enhanced data encryption, security certification, and more for consumers and businesses alike.
For consumer data spanning income, employment, insurance, brokerage, and more directly from the source, use MeasureOne.
Ready to take advantage of consumer-permissioned data? Try us for 30-days free.
Frequently Asked Questions
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