What is Data Leakage? Causes, Risks, and How to Stop it

Data is the most valuable resource any business possesses today, and when this information is mishandled the consequences can be severe. Whether it’s employees accidentally sharing details with unauthorized personnel, IT teams failing to apply best security practices when building databases or web applications, or malicious hackers targeting firms looking for valuable information to steal, the threat of data leakage is wide-ranging and needs to be taken seriously.

Data leakage refers to any unauthorized exposure of business information to an external source. This typically refers to cybercriminals such as hackers, However, it can also encompass anyone who has access to data they are not authorized to view, irrespective of whether they have malicious intentions.

It is a wide-ranging term, that can include both accidental or deliberate behavior and covers both the physical transfer of data, such as on phones, laptops or USB drives, as well as the digital exfiltration of data from a network.

The term data leakage is sometimes used interchangeably with data loss or data breach, but there are a few key differences to be aware of. Here’s what you need to know.

Data loss: In this scenario, data will be inaccessible. This can occur through hardware failures, power outages or ransomware attacks that encrypt information, for example.
Data leakage: These incidents mean the information is not only inaccessible but exposed. This means it will be in the hands of someone who does not have authorization to view it.
Data breach: This often indicates a malicious action. While a data leak can be caused by carelessness or negligence, a data breach usually involves a criminal or a malicious insider finding and exploiting a vulnerability in order to exfiltrate data from an organization.

There are a range of ways in which data leakage can occur, but the majority of incidents fall into one of a few key categories. Knowing what these are is an essential first step in building defenses to spot and block any threats before they occur.

Broadly speaking, data leaks can be attributed to one of three factors. These are:

• Human error: Perhaps the most wide-ranging root cause, examples of this can include losing devices containing data, emailing documents to the wrong recipient or IT staff misconfiguring applications in ways that leave data publicly viewable.
• Malicious insiders: This refers to people within the organization who access data without authorization. For instance, a disgruntled employee may try to take confidential data with them to a new employer when they leave the company, or look to sell secrets to a competitor.
• Outsider attacks: Hacking tactics such as phishing often aim to trick individuals into handing over data directly, or sharing login credentials that can then be used by criminals to enter a network and exfiltrate data.

There have been many high-profile data leakage incidents over the last few years, with the largest compromising information on millions of customers and having long-lasting consequences. For example, among the biggest data leaks in terms of affected users and financial damage was the Equifax data breach in 2017, which compromised over 159 million people’s records, eventually costing the company around $1.7 billion in remediation and recovery. 

In 2024 alone, notable incidents affected some of the world’ biggest and best-known brands included:

• Disney losing around 1.1 TB of data that was taken from its internal Slack channels, including employee login information, internal communications, and details about future projects.
• Ticketmaster having the records of 560 million customers stolen from its databases, including names, email addresses, phone numbers, and payment details.
• Change Healthcare paying a $22 million ransom to prevent the release of the sensitive data of 100 million Americans.

Data leakage isn’t just limited to hacking. Another high-profile incident was the Cambridge Analytica scandal, which revealed Facebook had allowed third parties to access the social media data of tens of millions of users without their consent. This ended with Meta paying $725 million to those affected in a class-action lawsuit.

All companies are at risk from data leakage in today’s digital-first environment. However, those that handle especially sensitive data, such as personally identifiable information (PII), financial details and medical records, are especially vulnerable due to the high degree of damage that can be done if this data is exposed.

Hackers know this, which is why they increasingly target organizations such as:

• Healthcare providers
• Financial institutions
• Government services
• Education providers

These are especially vulnerable to ransomware attacks that seek to exfiltrate data as they are often more likely to pay a ransom in order to avoid having data exposed.

When it comes to data leaks, prevention is much better than cure. Once a data leak has occurred, it’s often too late as the damage will already have been done. Therefore, it’s essential that firms have clear plans in place to avoid these incidents.

A holistic approach that covers all the major causes of data leakage is essential. For instance, when it comes to addressing user error, employees should receive training on what their responsibilities are when accessing data and how to spot incoming threats such as phishing.

Frequently reviewing IT systems to spot any misconfigurations and having a clear patching schedule to address zero-day vulnerabilities is also a must. It can be beneficial to conduct external penetration testing on a network, as a fresh set of eyes can help spot any issues the security teams have overlooked. 

Other tools that play a role in data leakage prevention include:

• Strong encryption
• Access management tools
• Data loss prevention (DLP) tools
• Patch management solutions

An important tool for spotting potential data leakage is an endpoint security solution that can identify and automatically block any unusual activity. For instance, dedicated anti data exfiltration tools are essential in this, as they can immediately spot any attempts to send data outside of a network to external sources, whether these are the result of hackers, malicious insiders or even unwitting employees who have been duped into sending data to criminals.

Keeping data secure and protected against leakage is far more than just a challenge for the IT and cybersecurity teams. The repercussions of any incidents will be felt across the business, with financial and reputational damage lasting for years to come. In worst-case scenarios, it could even threaten the future viability of a business. 

Indeed, one example of this is background check service National Public Data, which fell victim to a data breach in December 2023 that exposed the personal details of 1.2 million people. Less than a year later, the company filed for bankruptcy, with the legal expenses it incurred as a result of the attack cited as a key reason.

Common financial challenges resulting from data leaks include regulatory penalties, class-action lawsuits and paying for credit monitoring services for those affected. This is before issues such as reputational damage, which can lead directly to lost business and a fall in revenue, are taken into account. To avoid this, it’s vital for everyone within a business to be alert to the dangers and know what they need to do to minimize risk.