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What Is A Data Leak? A Guide To Managing Data Breaches For Employers

September 9, 2022
Inkit Team

At its core, a data leak is when sensitive data is accidentally exposed or gets out some other way. 

Typically, this means through lost hard drives, physical laptop or other device breaches, or through a cyber attack.

Whether it’s your personal information from your corporate server, sensitive employee information, or large-scale customer data that was lost, data leaks take different forms.

And while many cyber security attacks are unexpected, there are certain steps you can take to prevent data leaks.

After all, prevention is better than cure.

So, if you’re wondering how to better manage your data information and what to do in case your information gets leaked, you’ve come to the right place.

Below, we’ll cover how data leaks work, examples, some of the most common causes for leaks, best practices to prevent leaks, and more.

Here's what you'll learn:

  • What Is A Data Leak And What Are Some Of The Most Common Causes? 
  • What To Do If Your Company Sensitive Information Got Out. 3 Main Steps To Respond to a Data Leak
  • 5 Best Practices To Prevent Data Leaks Regardless Of Your Organization Industry

What Is A Data Leak And What Are Some Of The Most Common Causes? 

First things first, what is a data leak, exactly?

Essentially, a data breach or data leak means your sensitive, confidential, or protected data has gotten out to an untrusted environment.

Whether it is the potential reputational damage or financial, legal, and regulatory damage, a data breach can have long-lasting adverse effects on your company, regardless of its parent industry.

When we hear about data leaks or breaches, the first thing that comes to mind is a group of hackers working endlessly to crack a security system or a company's database.

While this certainly holds true in some cases, this is not the case in most instances of data breaches. 

Hackers find it very easy to exploit an organization with poor data management practices, especially if employees lack adequate data security awareness.

Unfortunately, in most cases of data breaches, the latter instance described above holds true. 

Hackers and malicious attackers don't have to sweat before exploiting secure systems and companies' databases.

A simple individual oversight or a flaw in your company's infrastructure can snowball into a disastrous data leak.

In fact, the most common forms of data leaks include:

  • Misconfigured software settings.
  • Social engineering or human error.
  • Recycled or reused passwords.
  • Physical theft.
  • Software vulnerabilities.
  • Employees using common, recycled, or easy-to-guess passwords.

And according to IBM, the average cost of worldwide data breaches in 2020 amounted to $3.86M.

infographic on the causes and consequences of data breaches

While many small businesses think they’re immune to data leaks, because hackers would rather target corporations, this isn’t at all the case. 

A new study reveals that 57% of SMBs believe they won't be targeted by online criminals, but almost 20% experienced an attack in the past year. For small businesses, the average cost of a data breach ranges around $108,000.

cost per type of breach

Generally, a data breach can occur due to vulnerabilities in company technology or user behavior (also known as social engineering).

Here’s how this works.

Technology data leaks

Connectivity features of mobile devices and computers are developing to match the pace of technology evolution. Protection of associated technologies can't match the pace of technological development.

This essentially means that newer technology is developed faster than we can achieve 'integral' protection. The status quo has resulted in a situation where we now value convenience over security.

Many 'smart office' products feature intrinsic structural flaws, like lack of encryption or proper management roles, which hackers are now exploiting.

Here are a few quick ways to encrypt your sensitive data:

User behavior data leaks

Even if your company's backend technology is perfectly designed and invulnerable, employees or users can have poor data and digital practices. 

Usually, this includes things like:

  • Not having an established corporate data security policy.
  • Lack of employee awareness and training.
  • Not properly securing your organization's remote environment.
  • Granting full network access upon authorization to everyone.
  • Failing to adapt to modern technologies.
  • And more.

Knowing what you should be protecting is also essential when you want to secure yourself against data leaks.

The 3 major sensitive information categories you should be striving to protect include:

  • Personal information - This includes information linked to individuals and, if leaked, could result in varying degrees of harm to said individual. Examples include social security numbers, medical data, passport numbers, biometric information, and personal financial information.
  • Business information - This refers to the totality of data that can cause varying degrees of damage to a company in a leak. They include financial data, supplier information, customer data, trade secrets, and other sensitive information.
  • Classified information - This refers to information and data that the government or a governmental body restricts because of security concerns. There exist different sensitivity levels, each with its hierarchical level of authority - restricted, secret, top-secret and confidential. 

Now, before we cover how to respond to data leaks, let’s briefly go over some of the most common reasons why data breaches occur.

How do data breaches happen?

To actively combat data leaks/breaches, you need to know what to look out for. 

Some of the most common reasons data breaches happen include:

  • Unauthorized access - This presents a scenario where an employee or user can access information outside their scope of work/authority, especially through an authorized co-worker's workstation. Even though the access can be accidental/unintentional, due to the unauthorized access, data is considered breached.
  • Criminal insider - Here, a user/employee deliberately accesses and/or shares data with the sole purpose of causing harm to your company. Information access might not be unauthorized. Said user might have a legitimate authorization. However, the intent remains nefarious.
  • Physical actions - Physical data breach incidents mainly involve the loss or theft of paperwork or electronic devices like laptops, phones, and storage devices - especially if lost electronic devices aren't encrypted.
  • Criminal hacking - This happens when malicious criminals outside your organization use the different means at their disposal to attack your network/employee and gather information for nefarious purposes.

What To Do If Your Company Sensitive Information Got Out. 3 Main Steps To Respond to a Data Leak

As with anything, destruction is always easier than construction. 

The same principle applies to data breaches and leaks. In many cases, you can't fix data breaches with a simple action like a password change.

The effects of a data leak will likely be long-lasting for your reputation, finances, operations, finances, and more.

And the sooner you take action against a data breach, the more likely you are to minimize its effects.

In that case, some of the biggest steps you should take are as follows.

1. Ensure the integrity of your operations posthaste

First and foremost, you have to ensure the integrity of your operations as soon as possible. 

Take immediate steps to safeguard your systems and address any vulnerabilities that contributed to the incident.

Once you have experienced a data breach, what you don't want to happen is to suffer multiple data breaches. So what you want to do first is secure your operations ASAP.  Immediately take steps to ensure that it doesn't happen again.

You can focus on assessing the damages afterward.

To achieve this, you'll have to secure and isolate the areas related to the breach. As long as you suspect that any area is related to the data breach, don't hesitate to lock them, change the access codes, and, if possible, shut them down.

Immediately mobilize your breach response team to avoid more data loss.

Depending on your business structure, what you want to do next is mobilize your breach response team. 

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A breach response team usually consists of individuals from the following departments.

  • Information technology (IT).
  • Human resources.
  • Legal.
  • Public relations.
  • Customer care.
  • Executive leadership.
  • Investors relations.
  • Communications.
  • Forensics (if you have).

Depending on the size and nature of your business, your response team should dynamically include members from a combination of these departments.

  • A forensic team is critical to your response plan. If you don't have such a team in-house, you should consider hiring independent forensic investigations to help investigate and determine the source and scope of the breach. 
  • Legal consultation is another crucial step to implement. Consult your legal counsel to discuss the repercussions of the breach and how to manage the legal (federal and state) ramifications effectively.

Interview people who discovered the breach

Your series of first responses should include an interview with those that discovered the breach. 

Talking to the first responders and anyone else who might know about the breach might be the breakthrough point of your investigation.

If you have a customer center, ensure that your agents know where to forward investigation relevant information and materials. 

Finally, ensure that you don't accidentally or deliberately destroy any forensic evidence during your investigation and remediation—document all your investigations.

2. Fix vulnerabilities

Once you've gotten to the bottom of the case, you'll want to fix your system vulnerabilities comprehensively.

Cooperate with your forensic team to implement targeted and general security solutions to prevent further breaches. 

Digital footprints from backup and logs and the data breach process will facilitate the process. You can also consider downgrading or upgrading users' and employees' access and implement the determined necessary remedial actions. 

3. Notify the appropriate parties

It is crucial that you notify law enforcement and other related/affected business and individuals once you experience a data breach.

Depending on the nature of information lost and your business location, familiarize yourself with the legal requirements that apply to your situation.

For example, if the data breach involved electronic personal health records, you must notify the FTC (and in some cases, the media), if you're covered by the Health Breach Notification Rule.

Loss of reputation is one of the most devastating effects of a data breach. 

Corporations like Target, Yahoo, Equifax, and others suffered a disastrous losses from data breaches. 

And today, many people remember these companies for the data breach incident whenever their reputation is concerned.

Therefore, it is essential to protect yourself and your organization from a data breach. 

Of course, no security plan is invulnerable. However, there are ways you can protect your business/company.

5 Best Practices To Prevent Data Leaks Regardless Of Your Organization Industry

Prevention is better than cure. 

The best way to manage a data breach is to pre-emptively avoid the eventuality. Here are a few practices that you can implement to prevent data leaks

1. Consider your service providers

If your data breach involves service providers, check their prior accessibility authority, and decide if you need to upgrade or downgrade these privileges. 

Also, ensure that your service providers are implementing good data management practices to prevent data breaches and double-check the veracity of their claims. 

Conduct routine vulnerability tests for your service providers to ensure they are always on their toes and are security-aware at all times.

2. Adapt network segmentation and compartmentalization

The usual practice of network installation involves segmentation and compartmentalization

If, however, your network is not segmented, we recommend you adapt the segmentation and compartmentalization setup. 

When you segment your network, a breach on one server or site can easily be isolated and won't expand to other segments. Also, it is easier to monitor data exposure on your network with the different segments. 

Data security is exponentially more effortless with the addition of segments and compartments to your network.

3. Develop a comprehensive communications plan

Develop a cross-platform communications plan that connects all affected players in your organization-employees, customers, investors, business partners, and other stakeholders

Ensure that you disseminate relevant information that will enable your customers to protect themselves. 

It is also important that you don't publicly share information that can put your customers/consumers at risk.

4. Prepare a list of relevant FAQs 

Prepare a comprehensive list of frequently asked answers about the data leaks and anticipate likely questions that your users will ask. Then prepare the most informative, precise, and understandable answers for these questions and post them where your users can easily access them.

Sensitizing your customers/consumers will promote good data security practices and could save your company a lot of time and money down the road.

5. Enforce and deploy holistic security protocols across all of your platforms

Last but not least, you’ll want to make sure the data leak doesn’t repeat itself.

Look into security protocols like:

  • AES 256 end-to-end encryption.
  • Sensitive document expiration and self-destruction so it doesn’t get out.
  • 2FA support.
  • BYOD security.
  • SSO Support.
  • Full document audit log.
  • Role-based access controls.
  • And more.

Though, settling the technological aspect of data vulnerability is not enough to assure security integrity. 

The good news is that unauthorized access to information, either accidental or nefarious, can be prevented and regulated by implementing user permission settings.

What does this mean?

Essentially, you can make it so that only certain people with a certain user access permission can view, edit, or manage certain, sensitive documents.

This way, you severely reduce the chances of a data leak.

With each step of your document management lifecycle, the more a document gets passed around, the higher the chances it’ll leak. In other words, not everyone in your organization should be accessing sensitive documents and information.

So, to simplify your security operations, you can set up different user roles and permission settings for your employees in your company.

You can set up different user roles such as:

  • Primary owner - Can close an account, transfer ownership, create other roles, and perform all actions.
  • Admin - Cannot close or transfer accounts, but can do everything else.
  • Editor - Can do all kinds of actions to files except delete permanently.
  • Reader - Can only view files. Sometimes entitled to download, depending on specific settings.
  • And more
inkit's home page for user management

If you’re managing and sharing a lot of sensitive files and documents across different departments, you’ll want to take steps to reduce the risk of “floating documents”.

Additionally, you can eliminate the need for manual exports of sensitive documents through secure document automation.

So, to recap this step, some of the best practices to decrease the chances of a data leak in your company are as follows:

  • Consider your service providers.
  • Adapt network segmentation and compartmentalization.
  • Develop a comprehensive communications plan in the case of a data breach.
  • Prepare a list of relevant FAQs when addressing the leak.
  • Enforce and deploy holistic security protocols across all of your platforms.

Conclusion

To recap, data leaks occur when there are technological and user vulnerabilities in your system. 

They can have long-lasting adverse effects on your company's reputation, finances, operations, and even land you in legal trouble. And that’s not even taking into consideration the industry compliance fines, the costs of data leaks, and more.

It’s essential you guard yourself and your company against such eventualities.

Hopefully, by following the best practices outlined above, you have a better understanding of how to protect yourself from data leaks.

If you’re managing many sensitive data and documents, you should consider investing in a robust document management system.

Inkit provides automated document generation with a built-in security platform, for industries such:

  • Information & telecommunication
  • Admin support services
  • Government & defenses
  • Healthcare organizations
  • Utility providers.
  • Financial services providers.
  • And more.

Is document automation the right solution for you?

Be sure to also see our guide on questions to evaluate document generation software!

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