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Thursday, June 13, 2024

Data breach risk can impact brand values by $223 billion: Infosys-Interbrand Study

Luxury brands and consumer goods are at greater value risk but technology, BFSI, and auto potentially suffer a higher overall brand value at risk, says the study. However, this data breach does not involve KrisFlyer and PPS member passwords, credit card information, and other specific customer data, such as reservations, ticketing, itineraries, passport numbers, and email addresses.

A potentially volatile risk of a data breach to the world’s 100 most valuable brands holds out a brand value impact of up to $223 billion, according to a study by Infosys and Interbrand, a global brand consultancy firm. The cybersecurity and brand value impact report, called ‘Invisible Tech. Real Impact’, looks at the long-term impact of data breaches on the value of the world’s top brands across sectors.

To quantify this risk qualitatively, Infosys and Interbrand laid out the brand factors most impacted when a company or entity suffers a data breach — “presence, affinity, and trust” and simulated in near-real economic conditions the resulting brand value at risk in the event of a breach, using Interbrand’s proprietary brand valuation methodology. In the backdrop of the rapidly evolving customer expectations and the significant shift to online platforms, customer conversations or interactions demand closer inquiry.

Infosys and Interbrand, however, found that industries such as technology, financial services and automotive could potentially sustain a higher overall brand value at risk from data breaches. On the other hand, luxury brands and consumer goods face greater value at risk as a percentage of their net income. While the technology sector could experience a brand value risk of up to $29 billion (up to 53% of 2020 net income), the financial services could sustain a $2.6-billion brand value risk (up to 52% of 2020 net income).

“Cybersecurity for long was seen as a cost of doing business. However, in this digital age, where a company’s reputation is based on its ability to protect customer data and establish digital trust, cybersecurity is becoming a business differentiator,” Vishal Salvi, Chief Information Security Officer (CISO) and Head Cyber Security Practice, Infosys, was quoted as saying.

The report also restates the importance of CISOs deepening their engagement with the board and put in place a strong governance ecosystem while deploying a ‘secure by design’ approach “to protect and secure their brand value and reputation”, added Salvi.

Ameya Kapnadak, who is Chief Growth Officer (India), Interbrand, said, there has been an essential shift in how brands engage with their customers. “As the lines between the physical and virtual worlds increasingly blur, and brands rely more and more on the digital world to create unique experiences for their customers, data breaches have the potential to dent the very core of the brand’s relationship with its customers. These shifts underscore the need to re-evaluate ‘hygiene’ aspects of customer experience, like cybersecurity.”


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