Up to $223b of the World's Top 100 Brands' Value Could Be at Risk from a Data Breach, Finds Infosys-Interbrand Study

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Mar 09, 2021, 06:19 ET

BENGALURU, India, March 9, 2021 /PRNewswire/ -- Infosys (NYSE: INFY), a global leader in next-generation digital services and consulting, and Interbrand, a global brand consultancy firm, today revealed that the potential risk in brand value of a data breach to the world's 100 most valuable brands could amount to as much as $223b, according to a joint cybersecurity and brand value impact report launched today. The report, called 'Invisible Tech. Real Impact,' examines the long-term impact of data breaches on value of the world's top brands across sectors.

View a short video on the report HERE

To quantify this risk, Infosys and Interbrand identified the brand factors most impacted when a company suffers a data breach - presence, affinity, and trust - and simulated the resulting brand value at risk in the event of a breach, using Interbrand's proprietary brand valuation methodology. Infosys and Interbrand found that industries such as Technology, Financial services and Automotive might suffer a higher overall brand value at risk from data breaches, whereas Luxury brands and Consumer Goods face greater value at risk as a percentage of their net income. Specifically, the report quantified the brand value risk different industries face because of a data breach, including:

Technology – Up to $29b brand value risk (up to 53 percent of 2020 net income)
Financial Services – Up to $2.6b brand value risk (up to 52 percent of 2020 net income)
Automotive – Up to $4.2b 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 $2.4b brand value risk (up to 115 percent of 2020 net income)

Vishal Salvi, Chief Information Security Officer & Head Cyber Security Practice, Infosys said, "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. Through this report, we bring a novel approach to quantifying the impact of a data breach to the brand value to help businesses understand and evaluate if the cybersecurity investments they are making are proportionate to the risk they face. It also reinforces the need for CISOs to engage with the board and build a robust governance ecosystem while employing a 'secure by design' approach to safeguard their brand value and reputation "

Ameya Kapnadak, Chief Growth Officer (India), Interbrand, said, "There's a fundamental 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."

For the study, Infosys partnered with Interbrand to simulate the value at risk for a brand in the event of a data breach. Interbrand's global team of valuation experts estimated the impact of a breach on a brand strength with scores from Best Global Brand (BGB) 2020 as a benchmark. The simulation used these 'post breach' brand strength scores to estimate the "Value at Risk" due to a breach, on the Best Global Brands. CMOs, CISOs and other decision-makers can leverage the methodology as a template to help them understand similar risks they might face to their brand value and calculate the right level of cybersecurity investment for them.

For a full copy of the report, please click HERE

About Interbrand

At Interbrand, we believe that growth is achieved when an organization has a clear strategy and delivers exceptional customer experiences. We do both, through a combination of strategy, creativity, and technology that helps drive growth for our clients' brands and businesses. With a network of 21 offices in 16 countries, Interbrand is a global brand consultancy, and publisher of the highly influential annual Best Global Brands and Breakthrough Brands reports, and Webby Award-winning brandchannel. Interbrand is part of the Omnicom Group Inc. (NYSE:OMC) network of agencies. For more information, please contact us, or follow Interbrand on LinkedIn, Twitter and Facebook.

Methodology

Having pioneered brand valuation in 1988, Interbrand have a deep understanding of the impact a strong brand has on key stakeholder groups that influence the growth business. Interbrand was the first company to have its methodology certified as compliant with the requirements of ISO 10668 (requirements for monetary brand valuation) and played a key role in the development of the standard itself.

There are three key components to all of Interbrand's valuations: an analysis of the financial performance of the branded products or services, of the role the brand plays in purchase decisions, and of the brand's competitive strength:

1. Financial Analysis

This measures the overall financial return to an organization's investors, or its economic profit. Economic profit is the after-tax operating profit of the brand, minus a charge for the capital used to generate the brand's revenue and margins.

2. Role of Brand

This measures the portion of the purchase decision attributable to the brand as opposed to other factors (for example, purchase drivers such as price, convenience, or product features). The Role of Brand Index (RBI) quantifies this as a percentage.

3. Brand Strength

Brand Strength measures the ability of the brand to create loyalty and, therefore, sustainable demand and profit into the future. Brand Strength analysis is based on an evaluation across 10 factors that Interbrand believes constitute a strong brand. Performance in these areas is judged relative to other brands in the industry and relative to other world-class brands. The Brand Strength analysis delivers an insightful snapshot of the strengths and weaknesses of the brand and is used to generate a road map of activities to grow the brand's strength and value into the future.

4. Value at Risk

For the purposes of this study, we estimated the Value at Risk that the Best Global Brands might have, in the event of a data breach. To do this we first arrived at estimates of a "post breach" brand strength score based on the brand strength factors that the breach might most impact – presence, affinity and trust. Using these post-breach brand strength scores allowed us to calculate the 'post breach' brand value. Finally, comparing the lower 'post-breach' brand value to the original brand value gave us the estimated Value at Risk.

About Infosys Ltd.

Infosys is a global leader in next-generation digital services and consulting. We enable clients in 46 countries to navigate their digital transformation. With four decades of experience in managing the systems and workings of global enterprises, we expertly steer our clients through their digital journey. We do it by enabling the enterprise with an AI-powered core that helps prioritize the execution of change. We also empower the business with agile digital at scale to deliver unprecedented levels of performance and customer delight. Our always-on learning agenda drives their continuous improvement through building and transferring digital skills, expertise, and ideas from our innovation ecosystem.

Visit www.infosys.com to see how Infosys (NYSE: INFY) can help your enterprise navigate your next.

Safe harbor:

"Certain statements in this release concerning our future growth prospects and financial expectations are forward-looking statements intended to qualify for the 'safe harbor' under the Private Securities Litigation Reform Act of 1995, which involve a number of risks and uncertainties that could cause actual results to differ materially from those in such forward-looking statements. The risks and uncertainties relating to these statements include, but are not limited to, risks and uncertainties regarding Covid-19 and the effects of government and other measures seeking to contain its spread, risks related to an economic downturn or recession in India, the United States and other countries around the world, changes in political, business, and economic conditions, fluctuations in earnings, fluctuations in foreign exchange rates, our ability to manage growth, intense competition in IT services including those factors which may affect our cost advantage, wage increases in India, our ability to attract and retain highly skilled professionals, time and cost overruns on fixed-price, fixed-time frame contracts, client concentration, restrictions on immigration, industry segment concentration, our ability to manage our international operations, reduced demand for technology in our key focus areas, disruptions in telecommunication networks or system failures, our ability to successfully complete and integrate potential acquisitions, liability for damages on our service contracts, the success of the companies in which Infosys has made strategic investments, withdrawal or expiration of governmental fiscal incentives, political instability and regional conflicts, legal restrictions on raising capital or acquiring companies outside India, unauthorized use of our intellectual property and general economic conditions affecting our industry and the outcome of pending litigation and government investigation. Additional risks that could affect our future operating results are more fully described in our United States Securities and Exchange Commission filings including our Annual Report on Form 20-F for the fiscal year ended March 31, 2020. These filings are available at www.sec.gov. Infosys may, from time to time, make additional written and oral forward-looking statements, including statements contained in the Company's filings with the Securities and Exchange Commission and our reports to shareholders. The Company does not undertake to update any forward-looking statements that may be made from time to time by or on behalf of the Company unless it is required by law."

SOURCE Infosys