Impact Of Data Breaches On MSP Business

From small businesses to global giants, no one is immune to data breaches. In fact, software supply chain attacks will cost businesses almost $80.6 billion in losses by 2026, per Juniper.

MSPs have to safeguard their internal data as well as client data from diverse threats, ranging from phishing attacks to supply chain compromises. Let’s explore why and which data breach prevention strategies MSPs should prioritize.

The impact of data breach attacks

The consequences of a breach extend to financial losses, damage to reputation, regulatory scrutiny, and a loss of customer trust. To deal with these data security concerns, 51% of organizations are planning to increase security investments as a result of a breach, according to IBM.

1. Client Trust and Reputation

As an MSP business, the clients rely on them not just for services but for the security of their confidential data. A data breach erodes the trust clients have in the ability to safeguard their sensitive information.

This loss of trust can lead to client churn and hinder the ability to acquire new businesses, impacting the reputation in the highly competitive MSP market.

2. Legal and Regulatory Compliance

MSPs must navigate a complex web of regulations such as GDPR (General Data Protection Regulation), HIPAA (Health Insurance Portability and Accountability Act), or CCPA (California Consumer Privacy Act), depending on the nature of the data they handle and the industries they serve.

A data breach attack leads to non-compliance with these regulations, resulting in possible legal consequences and fines.

3. Financial Losses

Beyond the direct costs of addressing a breach, organizations face financial repercussions in terms of legal fees, potential fines and loss of business. Verizon found that the average cost of a data breach attack is now $4.24 million, up from $3.86 million in 2021.

The financial impact extends to the investment needed to enhance cybersecurity measures and ensure that they are equipped to respond to data breaches.

4. Operational Disruption

Addressing a data breach often involves taking systems offline for investigation, containment, and remediation. For MSPs, operational disruptions not only affect internal processes but also the services provided to clients. Service interruptions lead to client dissatisfaction, eroding trust and potentially causing clients to seek alternative providers.

This disruption also causes decreased productivity and a diversion of resources from regular business activities.

5. Increased Insurance Premiums

To mitigate the financial impact of potential breaches, organizations are advised to consider cybersecurity insurance as a strategic component of their risk management strategy.

A data breach, however, influences insurance premiums. Insurers assess this increased risk to raise the premiums accordingly, making insurance costly.

How to prevent a data breach

Data breach prevention involves implementing measures and strategies to protect information from cyber threats such as business email compromise. While there is no silver bullet to prevent data breaches, they can minimize the risk by adopting the following measures:

Configuration Management

Configuration management is mainly vital  when leveraging Microsoft security hints

With configuration management, MSPs systematically define, maintain and control the settings and parameters of IT infrastructure. By establishing a standardized configuration baseline, security teams continuously monitor and address any deviations from the established baseline. In the event of a detected anomaly, configuration management facilitates remediation by automatically restoring configurations to their approved state.

Configuration management is particularly important when leveraging Microsoft security recommendations. SaaS Alerts, with its Fortify module, helps MSPs to implement Microsoft security recommendations across tenants. Fortify’s automated enforcement of security standards also ensures that configurations remain consistent.

Continuous Threat Monitoring

The persistent and comprehensive monitoring of an organization’s IT environment – network traffic, system logs, and user activities – detects security incidents before they cause significant harm.

SaaS Alerts provide continuous logging and monitoring of all activities, enabling threat identification by analyzing account-based activities and user behavior analysis. The platform then assigns threat scores – low, medium, or critical – to unusual activities, offering a nuanced understanding of potential risks and reducing alert fatigue.

Formal Security Framework

MSPs should establish and adhere to a comprehensive security framework, such as ISO 27001 or NIST Cybersecurity Framework. These formal frameworks address a range of security domains, including access control, cryptography, physical security, and incident response.

Following a blueprint of these domains helps minimize vulnerabilities and prevent data breaches.

Strong Access Control

Robust access controls ensure that only authorized individuals have access to sensitive data. The top data breach prevention tips include:

• Implementing a minimum 16-character password policy to enhance the complexity and strength of user passwords. This policy protects against common password attacks such as brute force attacks.
• Using multi-factor authentication (MFA) adds an extra layer of security by requiring users to provide multiple forms of identification before accessing sensitive data. This approach reduces the risk of unauthorized access, even if login credentials are compromised.
• Moving beyond SMS-based authentication and opting for more secure methods such as authenticator apps or hardware tokens. Authenticator apps generate time-sensitive codes for additional verification, while hardware tokens provide a physical device for authentication, reducing the reliance on potentially insecure communication channels.

Vendor Risk Management

SaaS Alerts actively engages in a comprehensive risk assessment with its vendors

As a part of a robust vendor risk management program, they should conduct thorough due diligence before onboarding vendors. It involves evaluating their security policies, practices, and track records. They should also enforce security requirements in contractual agreements with vendors to clearly outline expectations for data protection, confidentiality, and compliance.

SaaS Alerts actively engages in a comprehensive risk assessment with its vendors, emphasizing the importance of a mutual commitment to security.

Effective prevention of data breaches with SaaS Alerts

If an account compromise is not detected and addressed timely, it has the potential to become a data breach. As an effective data breach prevention tool, SaaS Alerts identifies an account compromise within minutes, a significantly faster response compared to the average detection time for businesses, which is often over a week.

The swift recognition allows for automatic blocking of the compromised account, helping in data breach prevention.