What Is a Data Leak? Definition and Prevention

A data leak is an organization's worst nightmare. Whether because of employee negligence, an insider threat, or the result of a hack, a data leak can result in financial, reputational, and legal repercussions. When an organization’s sensitive files are exposed, confidential data such as social security numbers, credit card numbers, phone numbers, financial information, and health information are all at risk.

Here’s what you need to know about data leaks.

• Data leak vs. data breach
• What causes data leaks?
• How serious are data leaks?
• What happens to leaked data?
• Data leak prevention tips

Data leak vs. data breach: What's the difference?

The difference between a data leak and a data breach is often the intention.

What causes data leaks? Nine common culprits

There are several reasons why a data leak occurs. Here are a few examples.

1. Insecure data storage

Databases such as AWS S3 buckets don’t always come with inherent security in place. Data may be easily discoverable if an organization fails to implement any authentication process.

2. Placing data on a public-facing website

An organization may accidentally place confidential data on a public-facing site without realizing it. Even if the information is not discoverable via an organization’s own website, if Google crawls the company site, malicious hackers can easily find the data.

3. A successful cyberattack or security compromise

A data leak can occur as a result of a malicious attack via phishing, network infiltration, or compromising an employee’s credentials.

4. Poor permissions management

If you’re not properly securing your data, you’re leaving it vulnerable to any bad actor looking for it. Security best practices include strong authentication and password protection and properly configured databases.

5. An insider attack or ex-employee compromise

Employees and third parties have access to a lot of sensitive information, which is why malicious attackers often target them. However, unscrupulous employees may decide to compromise their own organization if they receive a lucrative payment from a malicious party or if they’re a former employee who's looking to get revenge. An employee may even walk out with hard drives if there are no proper security measures in place.

6. Vulnerable software

Savvy attackers are always looking for outdated or vulnerable software in hopes of an easy hack. They can use malicious malware, an SQL injection, or other attacks to exploit an organization.

7. Misplaced devices

A misplaced device can easily result in a data leak. A forgotten laptop or phone at an event can result in a competitor’s employee accessing trade secrets, personal details, credit card information, and intellectual property or could even lead to a malicious actor posting stolen sensitive data on the dark web.

8. Employee negligence or accidents

An employee may accidentally share private information with a third party, house data in an unsecured location, or fall for a phishing or social engineering attack, resulting in a data leak.

9. Forgotten data

As an organization scales, grows, and changes technology, tools, and vendors, they may have forgotten where they house all their data. This situation can result in a data leak if that location turns up public or if an ex-employee is the only one who knows how to access it.

How serious are data leaks?

The risk of data leaks isn’t just data loss. Data leaks can damage many parts of the organization, harming your company’s:

• Reputation: At best, data leaks can be embarrassing. At worst, they may result in a significant trust issue that can impact a company’s valuation or shareholder value.

• Finances: Depending on the severity of the leak, you’ll likely incur costs related to data recovery, investigation of the incident, remediation, and any legal or regulatory costs.

• Business continuity: Data leaks can be severe enough to interfere with a business’s ability to serve its customers.

• Legal liability: A data leak can trigger a lawsuit depending on the affected parties and could result in an investigation related to regulatory or compliance issues.

• Compliance: Because of data privacy and protection laws such as GDPR and CCPA, data leaks can result in an investigation to determine if there was any negligence on the organization’s part, which can result in fines.

• Customers: If a data leak exposes customer data, it may risk future business with those customers, impacting revenue.

What do bad actors do with leaked data?

In a worst-case scenario, a data leak happens as a result of a bad actor, which can further compromise an organization. Here are just some of the ways.

Hold the data for ransom.

This situation differs from ransomware, which locks organizations out of data via malware. In this case, cybercriminals can threaten to release or expose the leaked data if the victims don’t pay a ransom.

Extort the company.

Suppose a bad actor causes a data leak due to an unknown vulnerability. In that case, they can threaten to share the exposure on hacker forums — putting your organization at risk of more attacks.

Use the data to carry out other attacks.

If bad actors leak your personal data, they and additional malicious actors can use that information to carry out attacks such as phishing, spam, identity theft, and similar scams.

Go to your competitors. 

Cybercriminals may try to sell your data to competitors who would benefit from learning any sensitive product, financial, or strategically important information.

Further damage your organization.

If a bad actor gets ahold of passwords and other credentials tied to your organization, they may be able to access important accounts and cause further damage to your organization.

Data leak prevention tips

To reduce the risks of data leaks in your organization, leverage tools and processes to ensure that your employees are aware of security best practices and aren’t adding unnecessary risk.

Hold cybersecurity training.

Cybersecurity training is an excellent way to help ensure employees know what kind of external threats may result in a data leak. Training can also help educate employees on good data privacy practices and protective data storage hygiene, processes, and practices to minimize accidental data leaks. This includes using MFA and tools like password managers to help create strong passwords.

Use multi-factor authentication.

One of the more common ways a bad actor can cause a data leak is via account takeovers. If organizations don’t have strong authentication measures, they’re exposed. MFA significantly improves account security strength, and organizations should use it as much as possible.

Monitor third-party risks.

Your third-party vendors, SaaS partners, and database infrastructure providers house essential information. You need to ensure these companies or applications don’t have any known vulnerabilities and that they’re configured securely.

Audit and classify data.

Not keeping track of your data is an easy way to lose it and cause an accidental data leak. Auditing and organizing your data based on how sensitive and business-critical it is can help you keep track of it while also prioritizing protecting your most sensitive data.

Put protective processes in place.

Set specific security policies and procedures that define who has access to what data, how data can be moved and placed in different locations, and the level of protection and security any data requires. This can also help prevent unauthorized access to your data.

Keep your software updated.

Bad actors often compromise companies and gain access to all data types through vulnerable software, applications, or devices. These vulnerabilities are usually fixed or patched via security updates, so it’s crucial to ensure you update your software as soon as possible to minimize any window of increased risk.

Manage your employees’ access and privileges.

Not every employee should have access to your most sensitive data. You should enforce a least-privilege policy and limit admin privileges, permissions, and critical data access to only those employees who require it. You may even provide access only when needed rather than have it accessible by role.

Have an emergency backup plan.

While you can try as best as possible to reduce the risk of a data leak, it does happen, and it’s essential to be prepared. You should run through various data leak scenarios and develop processes and actions that lead to efficient and effective data recovery, flushing out any potential attack entry points, remediating any vulnerabilities, and addressing any affected parties.

Plug those holes to prevent data leaks.

Data leaks can range from a mild embarrassment to a devastating blow, so it’s important to ensure you’re addressing any critical risks. Fortunately, many of the actions and processes you can take to minimize your risk of data leaks will also help improve your overall cyber resilience and posture, minimizing your risk of additional security threats while also helping prevent data breaches.

To learn more about the tools that can help you, check out Varonis’ DatAdvantage to capture, audit, and protect your data.