LibGuides: Cybersecurity: Data Breaches

Introduction

Data Breach

A data breach (also known as data spill or data leak) is unauthorized access and retrieval of sensitive information by an individual, group, or software system. It is a cybersecurity mishap that happens when data, intentionally or unintentionally, falls into the wrong hands without the knowledge of the user or owner.

Data breaches are partly the result of the rising availability of data due to the increase of digital products, which has put an overwhelming amount of information in the hands of businesses. While some of the information is non-sensitive, a lot of it is proprietary and sensitive information about individuals and companies.

Quoted from:
Frankenfield, J. (2021, May 12). Data breach. Investopedia.
https://www.investopedia.com/terms/d/data-breach.asp

Articles

3 billion Yahoo accounts hacked: 5 things you should do to stay safe. - PCWorld
The article offers advice to users who may have been affected by the data breach at internet services provider Yahoo. It covers an announcement from Yahoo stating that every account existing in 2013 had the password stolen by hackers. In response, the authors suggest using two-factor authentication on accounts, creating new passwords, and deleting unwanted or unnecessary emails.
Do Banks Price Firms' Data Breaches? - Accounting Review
This paper studies the financial consequences of a reported data breach for bank loan terms. Using a staggered difference-in-differences approach with treatment and control samples matched by data breach propensity, we find that firms that have reported data breaches face higher loan spreads and their loans are more likely to require collateral and demand more covenants. The effects are more pronounced when the data breach involves criminal activities or the loss of a large number of records, or when the breached firm belongs to certain industries or has a high IT reputation. Moreover, using the introduction of state mandatory data breach notification laws as an exogenous shock, we find that the negative effect of data breaches on bank loan terms is more significant after these laws took effect. Our evidence also suggests that breached firms that take more remedial actions following the breach incident receive less unfavorable loan terms. JEL Classifications: G10; G12. [ABSTRACT FROM AUTHOR]
Do data breaches damage reputation? Evidence from 45 companies between 2002 and 2018 - Journal of Cybersecurity
While data breaches have become more common, there is little evidence that companies that incur them experience a persistent decline in financial performance or security prices. Using new firm-level data between 2002 and 2018, this paper finds that firms experience a 26–29% increase in reputational intangible capital following an average data breach. However, the largest and most salient breaches are associated with a 5–9% decline in reputational intangible capital following a data breach. These effects are concentrated among firms in consumer-facing industries: smaller (larger) data breaches are associated with more positive (negative) effects. These results suggest that current regulatory guidance may not provide complete incentives for firms to invest in cybersecurity capabilities, particularly for small- to medium-sized breaches.