For any business in the modern world, keeping your customers’ personal data safe is becoming increasing important. Failure to do so is an expensive mistake that can seriously hurt a company’s finances and reputation.


A recent example of just how calamitous data-loss can prove to a company’s fortunes, is the ongoing saga involving the UK communications firm TalkTalk.


As the victim of a cyber-hack in which users’ financial details were stolen, TalkTalk have estimated that the incident could cost them up to £35m, with Chief Executive Dido Harding stating that "the estimated one-off costs are between £30m and £35m…That’s covering the response to the incident, the incremental calls into our call centres, obviously the additional IT and technology costs, and then the fact that over the last three weeks until yesterday our online sales sites have been down, so there will be lost revenue as a result.”


Whether this estimate proves to be accurate or an understatement largely depends on how quickly TalkTalk can reestablish trust. TalkTalk may be the victims of a crime, but as custodians of such important information, it is they that emerge as the villains.


Some 157,000 of TalkTalk’s customers’ had their personal details accessed by the hackers, with 15,600 bank account numbers and sort codes stolen. Harding has admitted that existing customers reacted angrily, though there are, she says, signs for optimism;


"We of course saw an immediate spike in customers cancelling their direct debit, but actually after a few days we saw many of those customers reinstating their direct debits again. So time will tell, but the early signs are that customers think we are doing the right thing.”


A positive for TalkTalk is that many of their customers would have found themselves unable to ditch the company, even if they wanted to.


TalkTalk’s contracts for phone, mobile, broadband and television services can last up to two years. In order to leave without breaking that contract - and incurring the resulting costs - customers must prove that they lost money as a result of the hacks.


Work has already begun on building bridges with their customer-base, with TalkTalk ready to offer upgrades to their services as recompense for the worry and uncertainty caused.


There’s more good news for TalkTalk in the shape of half-year results which reveal that the beleaguered company are set to see annual profits of £300m before tax, with revenues up 6%. It’s seen TalkTalk’s stock value start to rise again, though it still remains some 20% below its pre- cyber attack level.


The difficulty that TalkTalk face is that their brand could forever be associated with low-security. They are not the first company to find themselves in this position, but they are not as powerful a brand as say, Sony, who faced their own hacking scandals in 2011 and 2015.


While the likes of Sony are ingrained in the public’s consciousness to the extent that they could overcome such difficulties without long-term association, TalkTalk are at a more formative stage and face a longer road to recovery.