Cyberattacks and hackers are some of the most prominent types of security risks to an organization. The impact of security breaches on businesses is enormous and increasing every year. These events also hurt consumers through the loss of privacy, money and identity. Attacks on a company can quickly spread, hurting business partners and the economy at large. Risks in cybersecurity can threaten national security and even infrastructure, causing electrical outages or failure of military equipment.
Particularly vulnerable to these attacks are small businesses. They often have weaker security measures in place and provide a backdoor to their network of corporate clients who have valuable data at stake. Those threats can have widespread consequences, including these six:
1. Your Business Loses Customers
Data breaches often release droves of personal data into unknown, malicious hands. If your customers entrust you with credit card numbers or other financial information, these incidents can be especially harmful. When you experience a data breach, your affected customers face quite the ordeal. Some may subsequently experience identity theft or credit card fraud. When customers experience issues because of a company’s cybersecurity negligence, they often feel like their trust has been broken. Many may stop doing business with you.
How do data breaches affect consumers? Just as businesses can face many consequences, the impact of data breaches on individuals is far-reaching. Those repercussions can include:
- Stress related to worrying about the potential fallout of hackers accessing personal data.
- Extra time spent resolving issues caused by the breach, such as canceling credit cards or bank accounts.
- Fraudulent credit card activity or lost money.
- A lower credit rating, resulting from fraudulent credit card activity.
- Identity theft resulting from stolen passport numbers, social security numbers and bank account details.
- Loss of privacy and exposure of sensitive data such as medical records and social media login credentials.
- More money spent on identity theft protection or credit monitoring.
Any of these issues alone can cause your customers a major headache. Since 57% of consumers blame companies for stolen data rather than hackers, you’re bound to lose their trust and business following a cyberattack.
Even when unaffected by a data breach, many customers feel uneasy when a company experiences one. They might think it’s only a matter of time until the next one occurs and try to distance themselves and their data before then. After a data breach, 78% of consumers would stop interacting with a brand online, and 36% would stop interacting altogether.
That’s a lot of lost customers, and they will probably stay away for quite some time. In the U.S., 83% of consumers will stop spending with a business for several months in the aftermath of a breach. Even customers who stay loyal to you during a cyberattack can also be lost. Website or system downtime may make it harder for customers to patronize your business. While the average cyberattack takes minutes, the effects can ruin a company’s entire quarter or year.
2. It Can Damage Your Brand Reputation
All press is good press — except in the case of cybersecurity negligence. Large-scale data breaches for major brands are highly publicized. Every month of 2019 was plagued with at least one media-attention-grabbing data leak. You probably remember the names of the companies involved with some of the most egregious data breaches in history, even this many years later.
Leaks that don’t make the national news can still affect your brand reputation. For example, small businesses might find their names gracing local newspaper headlines or circulating on social media. B2B companies might garner coverage in their industry trade journals. In any case, even a little negative chatter can have wide-reaching effects.
When a data breach occurs, the whole world is watching — or your customers, at the very least. How you respond can have just as significant an impact on what people think of you. For example, many companies offer free credit and identity theft monitoring following a breach. Plenty others skip this step.
Even if your particular breach doesn’t warrant that response, people will look to you for solutions and straightforward communication. How you act and how quickly you respond can make or break your public image. You can avoid having to prove your competence in crisis management with a robust cybersecurity system.
There’s also another aspect of brand reputation damage resulting from cyberattacks — email hacks. Your business is chock-full of proprietary information that’s often passed around via email. If a leak reveals your secret sauce recipes to the world, some of your reputation goes with it. Meanwhile, emails can get taken out of context. Personal messages sent from work computers can get exposed, too. You risk executives and employees looking unprofessional in the public eye.
Further, online vandalism can leave off-brand messaging on your website where you least expect it. Some hackers might edit pages to include vulgar language couched in your approved content. You might not notice right away, and you’ll leave a bad taste in your website visitors’ mouths. They might also change contact information, so unsuspecting callers get redirected to other numbers. Vandalism causes inconsistent branding at best and loses potential customers at worst.
3. You Lose Intellectual Property
4. It Disrupts Your Online Management Software
Your online management software is one of the primary entry points for cyberattacks. Have you ever held off on updating your software because you knew it would interrupt your daily workflow? If you’re not careful, putting it off could disrupt more than your day. Software developers routinely develop and release patches to prevent hacks. Unfortunately, the average user probably doesn’t realize the gravity of these occasional updates. Some recent large-scale software hacks occurred after those software companies released patches that would have prevented these events if installed.
Without an Information Technology (IT) and cybersecurity management system that includes patch management, your business is vulnerable. And these platforms are not just the window in. They’re also frequent targets for attacks. Most business management software stores critical data. Any software you use that collects customer data, whether it’s a Customer Relationship Manager (CRM), an order management platform or something else, poses a considerable risk. Your accounting software probably holds your company’s banking and financial information.
Besides the threat of data breaches to your software, several types of cyberattacks can cause your software to misbehave. For example, they can paralyze your system and make data unavailable. Some types of security risks to an organization that may cause software disruptions include:
- Malware: Some software is specifically designed to perform a malicious task on a device, computer network or mobile device. Sometimes disguised as a harmless piece of software, Trojans often enter a system through human error. Once in the host system, they can wreak havoc on your network and even take over entire software systems.
- Ransomware: Attackers often encrypt data with the intent of eliciting a ransom to allow users to access it once again. Many business management software platforms house this data and often perform crucial automated tasks powered by it. If the data gets encrypted, it will interrupt your operations until you can recover it. In the meantime, any software automation that uses the encrypted data may run haywire or stop working.
- Distributed Denial of Service (DDoS) attacks: If attackers take over a broad network of devices, they can use these computers to activate a system’s functions and overload it. Cyberattacks like these often cause website crashes, and they can also overwhelm desktop and cloud-based software applications.
5. It Reduces Your Resources for Business Growth
Have you started calculating a tab for all the expenses you might encounter from a cyberattack? Between losing customers and intellectual property, cybersecurity breaches cut into your revenue streams. As much as 40% of the total cost of a cyberattack can be attributed to lost business opportunities. With a damaged brand reputation, your company’s total estimated value could plummet. Small and medium-sized businesses (SMBs) can face an onslaught of other indirect costs after a cyberattack, including:
- Civil lawsuits from affected customers or business partners.
- Fines from regulators for cybersecurity noncompliance.
- Refunds or incentives, like free credit monitoring, issued to customers.
- New insurance premiums.
Then, there’s the matter of resolving the issue. Depending on the severity of the incident, your IT department will likely spend many hours playing defense. A small team might even become overwhelmed. You’ll probably need to acquire new software and make other investments to counter the cyberattack. Restoring lost data is a lengthy process, costing you both time and money. It takes an organization an average of 280 days to discover and contain a breach.
The average cost of a data breach in 2020 is $3.86 million. As a small business, it’s easy to look at that number and think it doesn’t include you. However, 43% of online attacks are aimed at small businesses. Businesses of any size can expect to shell out $200,000 as a result of a cybersecurity breach. Those costs can seriously impact your ability to grow. The good news is that cybersecurity investments see a great return on investment (ROI), especially when you choose an affordable IT provider like PCS.
6. You Risk Closing Your Doors
Proactive Steps to Strengthen Online Security
While there are plenty of risks to a weak security system, there’s also plenty you can do to prevent those dangers. Here are six steps to stronger online security for your business:
- Train employees: By far, the biggest threat to your computer security is people. People click on phishing scam emails, download malware, access secure data on unsecured networks and make many other mistakes online. To prevent these issues, train your team in cybersecurity. Show them the do’s and don’ts of internet safety, and they’ll be less likely to make these errors.
- Practice cyber hygiene: Security software and the latest versions of your web browsers and operating systems are the best way to prevent viruses and other online threats. You should always download software updates as soon as they’re available and set your antivirus software to scan your systems after any update or new download.
- Use firewalls: Firewall programs are designed to keep your private network locked to outsiders. Your office’s internet connection and any home networks for employees who work from home should have a firewall installed.
- Secure Wi-Fi networks: Your company’s Wi-Fi network should be protected, encrypted and hidden. Your Wi-Fi router can be password secured and programmed not to broadcast the network’s name.
- Accept secure payments: If your business accepts credit cards, work with your bank to ensure the best tools and anti-fraud services are installed on your device. Do not process payments on the same computers you use for less-secure activities or for browsing the web.
- Practice smart password protection: Weak passwords are another typical doorway for hackers. Ensure you set strong password requirements for your users, and institute policies to have them changed every three months. You can also use multifactor authentication to protect sensitive data and assets.
Consult With PCS to Boost Your Security Game
At PCS, we know many small and medium-sized businesses don’t have the time or resources to manage IT. Unfortunately, that leaves you open to cyberthreats online. That’s why we offer affordable, world-class IT and cybersecurity services, customized to your business needs. Among our many services, we provide data backup and security, mobile device management and network management services to keep you secure online no matter where and how you browse. We also provide rapid response and emergency services if hackers strike.
If you’re ready to get started, request a consultation and we can help you identify what you need to bring your network security up to speed.