In this modern era, small businesses are faced with a new risk in the form of privacy breaches, phishing schemes, and ransomware attacks. These and other cyber threats are aimed at pilfering sensitive data on your IT systems. The following are some reasons why small businesses need cyber security.
1. Business Disruption
One of the main risks of a cyber-security breach is business disruption. A cyber-criminal activity is capable of paralyzing your network and forcing you to discontinue some elements of your business so hackers cannot access sensitive information. Before you can get your systems up and running, you may experience a loss of production.
2. Remedial Costs and Regulatory Fines
If you suffer from a cyber-security breach, you will have to contact affected customers and your data protection supervisory authority, which in this case is the information commissioner’s office. Contacting customers is a time-consuming and expensive endeavor. You may need to have help desks so the affected people can contact you and offer complimentary credit checks.
Additionally, the ICO may decide that the cyber security incident was caused by a GDPR (General Data Protection Regulation) violation. In this case, you will be subjected to a penalty and may even face legal action.
According to Mavon Insurance, some of the biggest payouts, fines, and settlements associated with cybercrime involved Home Depot and Uber. Home Depot paid out $200 million to customers and financial institutions plus fines after its point-of-sale system was hacked into. Uber was asked to pay $148 million in fines in 2016 after cybercriminals breached their IT systems and stole information from drivers and riders. The fine was because Uber breached reporting laws.
3. Reputational Damage
A cyber security incident can also lead to long-term reputational damage. It is difficult for organizations to earn the trust of their customers, and this is especially true for small companies. Many customers will lose their trust if they experience a data breach under your watch. A Benchmark Report by CISO established that one-third of organizations complained of reputational damage caused by a data breach.
Reputational damage can be measured in terms of how individual consumers respond to a cyber-security breach. Many consumers are fed up with having to get a new credit card because of identity theft or going through old accounts to update payment data.
4. Human Error
Another reason organizations need cyber security is to minimize human error. One of the main reasons SMEs are vulnerable to cyber security risks is human error. Small organizations are less likely to have staff awareness training programs; therefore, one could easily make an avoidable mistake. Staff should be required to follow basic security policies and practices like using strong passwords and handling and protecting customer information in a cautious manner. Staff training programs should also be used to instruct customers about the consequences of not following data protection policies.
Some avoidable mistakes that staff members could make include reusing their passwords on several accounts, being the victim of phishing scams, and failing to dispose of sensitive data. Small organizations are less likely to have the monitoring tools to prevent employees from using the information in a manner that is detrimental to the organization. For example, the company may not install access controls to limit an employee’s information.
Without these monitoring tools, any staff member could steal sensitive information and expose it on the dark web. Therefore, cyber security ensures that small organizations invest in training programs and monitoring tools to reduce human error.
5. Ransomware Attacks
Another threat that small companies are vulnerable to is ransomware. This is where a cyber-criminal locks users out of their computer systems and demand money to give you back access to your system. Companies should invest in training programs to teach employees how to mitigate the risk of ransomware attacks.
One way of reducing the risk of ransomware attacks is by backing up files to an external server. In this case, if your systems are infected, you can disconnect them, remove the data, and restore the information with the backups. This process may take some time, depending on your operations. However, it is less expensive than responding to ransomware demands.
Nowadays, antivirus programs are not enough to ensure network security. Businesses need to invest in sophisticated cyber security tools to combat the more advanced cybersecurity risks. The internet of things, the increase in remote workers, and the rise of hacking tools are additional reasons small businesses need to consider investing in strong cyber security measures.