Emails are the heart of corporate conversations, containing trade secrets, financial accounts, and more. IBM’s Cost of a Data Breach Report 2024 states that the average cost of a data breach is around USD 4.88 million, a 10% increase from last year.
Is your firm prepared to handle the risks, or is it leaving the door open for the next attack?
It may sound dramatic, but it’s a reality check for you that email breaches can change the outlook of your company in one second. Emails are one of the most vulnerable getaways for cybercriminals as multiple accounts are on their list to violate, and if they reach a single one, it’s a win-win for them.
Whether you are planning to build security or finalize your budget, you must understand the hidden costs of email breaches and the strategies for securing business communication channels.
In this article…
Danger Of Shadow Data In Your Email Account
Shadow data is simply confidential information lurking outside the official storage locations. Since shadow data doesn’t fall under a centralized data management system, it becomes a significant concern for businesses to recover and protect themselves from becoming victims of email breaches.
But where does this data come from? Shadow data resides in your employees’ devices, third-party cloud services if the providers are not taking care of that, or backup systems from the emails or sharing that is taking place.
The impact of shadow data goes beyond detection and containment challenges; it also drives up the overall cost of a breach. You’ll be shocked to hear that breaches involving shadow data are 16% more expensive than those without. As the cost increases, it adds to businesses’ extra time to recognize, analyze, and retrieve data from breaches involving shadow data.
It is not over; 35% of breaches involve shadow data, which is a big number, so you need to gain control over shadow data with proactive email security measures such as:
- Centralizing your data storage into a more secure environment reduces the chances of scattered data.
- Implementing an advanced data discovery tool that can detect data residing in every location, be it email backups or archives.
- Authorizing granular level access controls such as role-based and MFA to ensure that only required personnel access it.
- Regular email data monitoring, including user account activity and flagging the data storage spots.
Operational Disruptions: Downtime Costs More Than Money
If you are a business entrepreneur, you might be able to understand how one second of downtime can feel like years, especially when your business gets paused due to it. The average cost of downtime for large organizations can now reach an astonishing $9,000 per minute. And if you are from a sector that deals with client data and operations on an immediate basis, it can reach up to $5 million an hour, which is a lot.
Simply, you can’t do it if you have to communicate with your clientele urgently via email. The numbers speak for themselves. It’s time to understand that downtime isn’t just a temporary operational risk but an existence risk that can make any business go bankrupt within a year.
Skills Shortage: A Key Factor Driving Higher Breach Costs
In 2024, businesses have seen a noteworthy uprising in costs of data breaches attributed to a shortage of skilled cybersecurity professionals averaging USD 5.74 million, which was USD 5.36 million the previous year.
Such a spike in email data breach costs with unskilled labor creates a slow response time for businesses, implying financial risk and data exposure. Your critical data is in the wrong hands if your business has unskilled security professionals. Security personnel can only implement advanced-level security protocols with expertise, making your business more vulnerable to email breaches.
Source: Cost of a data breach 2024 | IBM (Page 25)
Since businesses face a cybersecurity skills gap, they have moved to outsource security services with top-tier and expert-managed security services that can help them with shortened recovery periods, thus reducing the overall breach cost. Moreover, it is difficult for unskilled professionals to stay compliant with regulations, further triggering hefty penalties.
As the cost of breaches continues to reach a high toll, it is time to address the skills shortage by focusing on employee training programs that include both new and current employees outside of the security teams that help raise awareness about spam emails, human errors, and other issues that can lead to email data breach.
Breaches Involving Extortion Attacks: Understanding the Financial Impact
Extortion attacks occur when hackers infiltrate your business’s confidential system or data. They demand payment to stop the attack or regain data control based on the data’s worth. Some of these can be ransomware, data exfiltration, and destructive attacks.
Here, one type of extortion is email, where hackers make a business the target by sharing a mail with a link that exposes their private information. As a result, they ask for ransom, or they can release it on the dark web.
Destructive extortion represents a costly side of cyberattacks for businesses, costing around USD 5.68 million to businesses, along with the risk of losing client trust and destruction of goodwill. The high cost is generally due to the extensive damage caused by restoring the data and the extended recovery period.
Organizations that involved law enforcement in investigating extortion attacks saw a dramatic reduction in breach costs.
The presence of law enforcement investigators helped reduce the financial impact of all three types of extortion attacks by providing additional resources, expertise, and support in handling the situation.
Source: Cost of a Data Breach 2024 | IBM (Page 27)
Law enforcement involvement can help organizations by tracking and tracing the attackers, providing legal and investigative resources, and helping negotiate with the attackers to reduce the ransom demands or pressure them to cease their activities.
What’s More Hidden? The Reputational Costs of Email Breaches
While the financial impact of email breaches is well known, it also imposes hidden expenses in reputational damage that is relatively not in digits but in company success value. Loss of clients, decreased investors’ trust, and diminished goodwill are immediate and long-term reputation costs of email breaches. You may get your data back, but this reputational loss in the market will linger long, even after everything gets sorted out for years.
Loss of Customer Trust
How does any successful business run? It’s always due to the trust won from the clients. When the business fails to protect its confidential data, clients also feel that they can’t trust you with their data. As per a Consumer Study on Aftermath of a Breach, 78% of consumers avoid doing business with a company that has suffered a data breach, even if it did not personally impact them.
It results in client attrition, making it challenging to recover from. It can lead to current customers ending their contracts and refraining prospects from becoming your clientele. Moreover, clients directly impacted by the attack may create negative sentiments on social media.
Media Scrutiny and Negative Publicity
Email breaches involving client data can attract negative media publicity, often amplifying reputational damage. For instance, HealthEquity, a healthcare firm, suffered a data breach in July 2024, where their partner’s accounts were hacked. The hacker gained access to HealthEquity’s systems and stole the protected information of 4.3 million individuals
The behavior was detected by noting the partner’s ‘anomalous behavior’ on the account. It became a high-profile breach that caused the company to lose millions and portrayed a negative image in the industry.
Impact on Employee Morale
A breach does not only affect customers and investors—it can also have significant internal consequences. Employees may feel demotivated or even blamed for the breach, particularly if it’s perceived that internal security protocols were inadequate. It can lead to decreased morale and insecurity within the workplace. Employees who feel that their company has failed to protect their customers’ data may begin questioning the organization’s leadership and long-term viability.
The effects can be even more pronounced when employee data security is compromised in a breach. Employees might feel betrayed by their employer, leading to increased turnover and difficulty attracting new talent. The broader company culture can suffer, resulting in more disengaged staff and reduced productivity and innovation.
Additionally, employees responsible for managing the fallout from a breach—whether in IT, customer service, or PR—can experience burnout. The stress of addressing the breach and the external pressures from the media and customers can take a toll on those involved in crisis management.
Other Noteworthy Impacts of Email Breaches
| Hidden Cost | Potential Impact |
|---|---|
| Loss of Competitive Advantage | Exposure to proprietary business data can erode market position and innovation potential. |
| Impact on Vendor Relationships | Third-party vendors may reconsider their partnership or impose stricter terms. |
| Increased Due Diligence Requirements | Future investors or partners may demand more extensive security measures, delaying or complicating deals. |
| Decreased Employee Retention | Employees may leave due to damage to the company’s reputation or increased stress related to the breach |
| Decreased Stock Market Value | Publicly traded companies may see a significant drop in stock value, affecting market perception. |
Strategic Security Investments for 2025
As 2025 approaches, businesses are prioritizing enhancing their email security systems and reducing the chances of cyber breaches. Central to these efforts lie two goals: an incident response (IR) plan to minimize the consequences of a breach and adopting advanced threat detection techniques to neutralize threats in real-time.
A significant portion of resources will be allocated to strengthen identity and access management (IAM) systems to tighten access control and navigate the increasingly complex cybersecurity landscape of 2025, ensuring organizations remain resilient in the face of emerging risks.
These strategic investments in threat detection, employee training, and endpoint security represent a comprehensive approach to cybersecurity in 2025. Businesses that embrace these measures will be better equipped to face the challenges posed by evolving threats and safeguard their critical assets from costly breaches. With email continuing to be a central target for cybercriminals, these strategies will not only help mitigate the impact of breaches and establish a more secure, resilient infrastructure for the future.
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