The risks are painfully high to ignore
Cyber attacks have been steadily rising over the past decade and this year was no different. With the increased use of technology and remote working practices, the opportunities for cybercriminals to infiltrate company data networks have grown exponentially with the pandemic. Twitter, Canon, and Honda, are some of the big names that have had to grapple with the harsh consequences of cyber attacks this year.
But it’s not just big corporations that become targets of sophisticated cybercriminals. Small businesses are equally vulnerable and can easily fall prey to an attack. In fact, they represent 43% of data breach victims according to a Verizon study. That’s a staggering statistic that demands small business owners to take note.
Why do cybercriminals target small businesses?
Many companies often assume that cybercriminals have more to gain by targeting larger corporations. This is a common misconception that provides small businesses with a false sense of security. And without a dedicated in-house IT team or enough budgets to invest, they continue to turn a blind eye to security measures. But this makes them much more attractive to cybercriminals over their larger counterparts with sophisticated security infrastructures.
Moreover, the lack of security policies and employee training leave more room for errors. This can result in increased vulnerabilities such as compromised passwords and data sharing methods. In fact, according to studies, human error is responsible for more than one in five data breaches.
And sometimes your small business could be targeted to get access to a larger organization that you’re working with. Besides, every business, no matter how small they are, possesses sensitive or confidential data. These can include employee information, customer data, business plans, sales contracts, supplier databases, financial details, and proprietary information. And all these could be of significant value to a criminal.
The impact of a cyber attack on your small business
As technology advances, criminal activities have continued to grow in complexity and sophistication. Today, a cyberattack could paralyze a small business in ways unimaginable.
Here are some of the most common impacts of a malicious attack.
1. High financial stakes
As much as 86% of data breaches are financially motivated, and these can take many forms. For example, ransomware attacks can hold company data hostage until a hefty ransom is paid, often in bitcoins. Email phishing attacks are even more popular and can lure unsuspecting employees to transfer company funds to fraudulent accounts.
And the financial cost to a business doesn’t just stop there. It can include legal fines, compensation to customers, repairing and replacement costs of IT infrastructure, and costs of data recovery. The indirect costs of lost sales due to system downtime could also be significant. And for many small businesses, this combined financial impact could be hard to recover from.
2. Long-term business disruptions
The operational impact of data loss due to a cyberattack is multifaceted and could have a crippling effect. Imagine losing your customer data due to a system crash triggered by a malware attack. The impact on your operations could be detrimental. Tracing back information using paper trails could take weeks and months. The disruptions to workflow and lost opportunities might be hard to measure. With many businesses relying solely on digital records, you might not recover the data at all.
And when your sensitive company data get into the hands of malicious criminals, you can never predict the long-term consequences for your business and stakeholders.
3. Credibility loss and reputation damage
When customers, employees, or suppliers provide you with their personal details, whether it’s contact information or bank details, they expect you to ensure those data are protected. So, when a data breach takes place, your stakeholders will lose trust.
And the impact of credibility loss could last a long time. After all, digital word of mouth is quite powerful and could cause irreparable damage to your company’s reputation. And social sharing will make it difficult to contain the spread of information. All these could bear significant implications for a small business.
4. Loss of competitiveness
Sometimes a cyberattack could be the result of corporate espionage. This is especially encountered when there is intense competition.
Needless to say, your business data is a powerful asset that provides you with a unique edge to compete. These can include your customer databases and supplier contracts and even employee information. A rival getting access to any of these data could put your business competitiveness at serious risk.
A business’s confidential and sensitive data are not just limited to these. Getting hold of your marketing plans, for example, could enable your competitors to plan counter-campaigns, making your marketing efforts ineffective. Patents and formulas will disclose your most guarded product details, allowing your competitors to easily replicate or even outmatch your products.
5. Legal implications
The media have been rife with news stories about legal fines and penalties following high-profile data breaches. This is because many countries and states have privacy laws to safeguard customer data, and a security breach could mean facing a class-action lawsuit. The European Union’s General Data Protection Regulation, better known as GDPR, is a good example. The US also has various sector- and data type-specific legislation to protect personal information.
These can govern how businesses collect, store, use, and protect stakeholder data. And when a company fails to safeguard this information, whether due to a cyber attack or simple negligence, it could face dire consequences.
Prioritizing cybersecurity
Today it has become virtually impossible to operate without integrating technology. Every business is connected to the cyber world one way or another—whether it’s by setting up a website, using cloud storage solutions, or simply using emails. This has inevitably increased your exposure to cyber threats.
And the data economy we live in today means data comes with a high price tag. So, your business data provides lucrative opportunities for cybercriminals to make easy financial gains. This makes any business vulnerable to cyber threats, regardless of their scale.
So start assessing your data assets. Devise cybersecurity measures with strong policies and guidelines. Invest in training employees and strengthening your security infrastructure. After all, the importance of cybersecurity for your small business cannot be stressed enough, especially when the stakes are sky-high.
