To quantify this risk, Infosys and Interbrand identified the brand factors most affected when a company suffers a data breach – presence, affinity and trust – and used the to simulate the resulting brand value that would be at risk in the event of a breach Brand valuation method developed by Interbrand. Infosys and Interbrand found that industries such as technology, financial services and automotive could suffer from higher total brand value at risk from data breaches, while luxury brands and consumer goods as a percentage of their net income face higher risk value. Specifically, the report quantified the brand equity risk that various industries are exposed to as a result of a data breach, including:
- Technology – Up to 29b $ Brand value risk (up to 53 percent of 2020 net income)
- Financial Services – Up to $ 2.6 billion Brand value risk (up to 52 percent of 2020 net income)
- Automobile – Up to $ 4.2 billion Brand value risk (up to 77 percent of 2020 net income)
- Consumer goods – up to $ 5b Brand value risk (up to 114 percent of 2020 net income)
- Luxury – up to $ 2.4 billion Brand value risk (up to 115 percent of 2020 net income)
Vishal salviInfosys, chief information security officer and head of cybersecurity, said, “Cybersecurity has long been viewed as a business expense. In this digital age where a company’s reputation rests on its ability to protect customer data and digitally establish trust, cybersecurity is becoming a business differentiator. With this report, we bring a novel approach to quantifying the impact of a data breach on brand equity to help companies understand and assess whether the cybersecurity investments they have made are proportionate to it The Risk They Are At Risk also increases the need for CISOs to engage with the board of directors and build a robust governance ecosystem while employing a “secure by design” approach to protect their brand equity and reputation. “
Ameya Kapnadak, Chief Growth Officer (India), Interbrand, said, “There is a fundamental shift in the way brands interact with their customers. As the lines between the physical and virtual worlds become increasingly blurred and brands increasingly rely on the digital world for their customers.” Delivering unique experiences to customers, data breaches can break the very core of the brand’s relationship with their customers. These shifts underscore the need to re-evaluate the hygienic aspects of the customer experience, such as cybersecurity. “
For the study, Infosys partnered with Interbrand to simulate the value of risk to a brand in the event of a data breach. Interbrand’s global team of valuation experts estimated the impact of a breach on brand strength using the results of the Best Global Brand (BGB) 2020 as a benchmark. The simulation used these brand strength values after the violation to estimate the “Value at Risk” due to a violation at Best Global Brands. CMOs, CISOs, and other decision makers can use the methodology as a template to understand similar risks to their brand equity and calculate the right level of cybersecurity investment for them.
For a full copy of the report, please click HERE
At Interbrand, we believe that growth is achieved when a company has a clear strategy and delivers exceptional customer experiences. We do both through a combination of strategy, creativity and technology that drives the growth of our customers’ brands and companies. With a network of 21 offices in 16 countries, Interbrand is a global brand consultancy and publisher of the influential annual Best Global Brands and Breakthrough Brands reports as well as the Webby Award-winning brand channel. Interbrand is part of the agency network of Omnicom Group Inc. (NYSE: OMC). For more information, please contact us or follow Interbrand on LinkedIn, Twitter and Facebook.
After pioneering brand valuation in 1988, Interbrand has a deep understanding of the impact a strong brand has on key stakeholder groups that influence the growth business. Interbrand was the first company whose methodology was certified as compliant with the requirements of ISO 10668 (requirements for the valuation of money tokens) and played a key role in the development of the standard itself.
All Interbrand reviews consist of three key components: an analysis of the financial performance of the branded product or service, the role of the brand in purchasing decisions, and the competitiveness of the brand:
1. Financial analysis
This measures the total financial return for a company’s investors, or economic profit. Economic profit is the brand’s after-tax operating profit less a fee for the capital used to generate the brand’s sales and margins.
2. Role of the brand
This measures the part of the buying decision attributable to the brand as opposed to other factors (e.g. buying drivers such as price, usefulness, or product features). The Role of Brand Index (RBI) quantifies this as a percentage.
3. Brand strength
Brand strength measures the brand’s ability to create loyalty and thus sustainable demand and profit in the future. The analysis of brand strength is based on an assessment based on 10 factors that, in the opinion of Interbrand, represent a strong brand. Performance in these areas will be judged against other brands in the industry and against other world-class brands. Brand strength analysis provides an insightful overview of the brand’s strengths and weaknesses and is used to create a roadmap of activities that can increase the strength and value of the brand in the future.
4. Value at Risk
For the purposes of this study, we estimated the Value at Risk that the best global brands could have in the event of a data breach. To do this, we first came up with estimates of a brand strength score after a breach, based on the brand strengthening factors that the breach could have the most impact – presence, affinity, and trust. With the help of these brand strength values after a violation, we were able to calculate the brand value after a violation. The comparison of the lower brand value after the infringement with the original brand value finally resulted in the estimated value at risk.
About Infosys Ltd.
Infosys is a leading global provider of next-generation digital services and advice. We enable customers in 46 countries to manage their digital transformation. With four decades of experience in managing the systems and functions of global companies, we expertly guide our customers on their digital path. We do this by giving the company an AI-powered core that helps prioritize making changes. We also support the company with agile digital on a large scale to achieve unprecedented levels of performance and customer satisfaction. Our always up-to-date learning agenda drives your continuous improvement by building and transferring digital skills, expertise and ideas from our innovation ecosystem.
Visit www.infosys.com to learn how Infosys (NYSE: INFY) can help your business navigate your next business.
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