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The Growing Threat: Why Small Businesses Need Robust Cybersecurity

Updated: Jan 10


A Man working at a laptop

As the world continues to increase its reliance on technology, small businesses are becoming more focused on utilizing digital landscapes to thrive and reach wider audiences. However, this growing utilization paves the way for security breaches and financial setbacks.

Verizon's 2022 Data Breach Investigations Report shows a 13% increase in cyber threats compared to the last five years combined. The 2023 DBIR report reveals 699 incidents for businesses with fewer than 1,000 employees in the first half of the year, with 381 cases of confirmed data disclosure.

The figures are alarming and are expected to grow even more by the end of 2025, reaching a cybercrime cost of 10.5 trillion. This article dives deep into understanding the types of cyberattacks causing this damage to small businesses, why they are at risk, and the steps they can take to avoid them.


Types of Cybercrime Targeting Small Businesses


In 2020, cybercrime was ranked as the fifth most significant risk, where IoT attacks alone are expected to double by the end of 2025. Following is the list of common cyber attacks that affect small businesses quite often:


Business Email Compromise


BEC is one of the most common attacks affecting SMBs. It targets the company’s employees with access to sensitive information or funds by impersonating a vendor or high-level executive and asking for sensitive information or wire transfers.

A homelessness charity, “One Treasure Island,” fell victim to a BEC attack in 2020, causing them to lose over $650,000 that couldn’t be recovered.


Ransomware


In a ransomware attack, the hacker encrypts the victim’s data and demands ransom in exchange for the decryption key. About 70% of the ransomware attacks were reported to be directed at small and medium-sized businesses in 2021.


Phishing


A remote attacker compromises the user account authentication, resulting in a company data breach. According to a study, more than 80% of attacks result from credential loss. This is done by various methods, like dictionary attacks, brute force attacks, phishing, etc.


Distributed Denial of Service (DDoS)


In a Distributed Denial of Service (DDoS) attack, attackers flood a website with many fake requests. This creates a digital traffic jam that the website uses too much time and processing power to handle. As a result, it fails to respond to genuine users.


The Financial Impact of Cybersecurity Breaches


Cybercrime is not limited to one small business industry but has spread its wings across all. The table below lists all the industries along with the financial impact that faced as a result of cyber attack:



Industry

Common Cyber Attacks

Financial Loss

Healthcare

Malware, Phishing emails, and Unsecured networks.

More than $6 billion each year

Financial Services

Phishing, Insider Threats, and Data Breaches

Estimated $18.5 million every year

Retail

Data Breaches, Payment, and Card Skimming

Average cost $3.28 million

Education

Data Breaches and Ransomware

Over $0.837 million per attack

Energy and Utilities

Malware and Industrial Sabotage

Average $17.20 million every year

Government

Fraud, Espionage, and Blackmail.

Manufacturing

Sabotage and Intellectual Property Theft

Estimated $4.47 million in 2022

Why are Small Businesses at Higher Risk for Cyber Attacks


Cybercriminals are often drawn to small businesses because they possess valuable information, customer data, and digital infrastructure, much like larger enterprises. Moreover, since small businesses have weaker security measures, cybercriminals find them easier to crack than larger enterprises.

This poses a significant challenge for SMBs because the attack methods are as sophisticated as those used against bigger companies. Once hackers breach the systems, they can either use the data for personal gain or sell it to others. Consequently, smaller businesses can become overwhelmed by highly advanced attacks.


The Path Forward: Taking Robust Security Measures


Since the number of cybercrimes is ever-increasing, it’s high time to put into practice some security measures for your businesses. The following are some best practices that you can follow to protect your company from devastating attacks and improve your cybersecurity posture:


Limit Data Transfers


With more employees working remotely, data transfers between personal and business devices are common. However, storing sensitive data on personal devices increases vulnerability to cyberattacks. Encourage employees to use secure company systems for work-related tasks.


Download Carefully


Downloading files from unverified sources can expose systems to security risks. Emphasize the importance of downloading files only from trusted sources and avoiding unnecessary downloads to minimize susceptibility to malware.



Picture of a simplistic password on a sticky note that is on top of a laptop keyboard




Enhance Password Security


Using strong passwords can help you defend your business against cyber threats. Encourage your employees to use complex and nonsensical passwords. Additionally, regular password changes can also help you avoid these attacks.

Remember!

Writing down or sharing passwords to protect sensitive data is never a good idea.


Keep Software Updated


Outdated software can be vulnerable to attacks. Ensure that you implement regular installation of software updates to enhance security measures. All your devices and applications must be up-to-date to reduce the risk of exploitation.


Monitor for Data Leaks


Regularly monitoring data and quickly identifying leaks can mitigate the potential consequences of long-term data exposure. Utilize data breach monitoring tools that actively scan for suspicious activity.


Employee Training


Conduct regular training sessions to educate employees on identifying and responding to potential cyberattacks. Stress the importance of following secure password and email policies, as employees play a critical role in network security.


Implement Multifactor Authentication (MFA)


MFA provides an additional security layer and requires users to provide multiple forms of identification to access systems or information. Small businesses should adopt MFA to reduce the risk of password-based attacks.


Use Virtual Private Networks (VPNs)


VPNs safeguard company resources, regardless of a business's size. Implement user-friendly VPN solutions to protect data and ensure secure remote access.


Develop an Incident Response Plan


In addition to preventive measures, develop a plan to respond to cyberattacks. Outline the steps during a breach, including contact information, containment strategies, and communication protocols with customers and stakeholders. This is called Cyber Resilience and is just as important to focus on as Cyber Hardening ( i.e. implementing security mechanisms)


The Takeaway


Cyberattacks pose significant threats to small businesses, potentially leading to massive financial losses and, in some cases, even business closures. To some extent, every industry faces these threats, but some are more susceptible than others. It is crucial to understand the importance of safeguarding your data and taking deliberate steps to ensure its security. By following the best practices mentioned above, you can protect your business effectively and without unnecessary complexity.

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