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March 16, 2021

Brand value risk from data breach

Brands are among the most valuable assets of companies. Trust that customers have on a brand is most important for customer engagement, and affinity.

In a technology-driven and data-rich world, data security has become a critical aspect of any business. Data breaches can affect the long-term relationship between the customers and the brand. Brand value is most sensitive to a loss of trust resulting from data breaches.

In a recent study, Infosys and Interbrand analyzed the maximum risk of brand value loss in case of data breaches. For the 100 Best Globals Brands ranked in the 2020 Interbrand list, the maximum risk amounts to a loss of 11% of brand value. While this figure doesn’t look dramatic, it can translate to more than 100% of net annual income, depending on sectors.

The authors of the study suggest that brand owners re-evaluate ‘hygiene’ aspects of customer experience, like cybersecurity. MARKABLES adds that brand owners establish the value their brands, quantify the risk they are exposed to, and re-think their approach to both risk avoidance (cybersecurity), and risk management (brand insurance coverage). See our post on insurance coverage of IP backed loans here.

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