One of the most common ways cybercriminals attack businesses is by phishing. A successful cyber-attack can cost a small business an incredible amount of money to recover. Some organizations may not recover from such attacks.
Phishing attacks are gaining momentum because they are easy to set up, rewarding, and pose little risk to cybercriminals. It can be as simple as hosting a fake webpage or malicious file and sending spoofed emails to victims and waiting for stolen access or data.
Cybercriminals employ two approaches to phishing. The more common approach is general phishing which involves mass fake email campaigns in the hope of getting as many victims as possible. The other method is spear phishing where attackers customize phishing emails to their target in order to increase the chance of success.
The cost of a phishing attack can be grave depending on the attack scope. We discuss some of the ways that phishing attacks affect businesses below:
1. Loss of Data
Clicking on a malicious link in an email can hand over the data and system of an organization to a hacker. They are then free to do what they want including theft for further criminal purposes, corruption, and deletion. Data loss is considered the most severe effect of phishing attacks.
2. Damaged Reputation
Companies suffer reputation loss following a data breach executed through phishing attacks. Announcement of a breach leads to loss of trust for the company among the general public. Regardless of an organization’s previous standing, data breaches exert a strong negative effect on its brand and it may be seen as untrustworthy for a long time following a successful hack.
It could induce public backlash against a company for not doing enough to protect user’s data.
3. Direct Monetary Loss
Extra funds will be needed to manage identity protection, compensation of customers or employees whose data was stolen following a phishing attack. Funds could also be transferred out from a company’s account through impersonation via phishing.
4. Loss of Productivity
Data breaches or system compromise arising from phishing attacks cause business disruption. Following a successful phishing attack, a large part of a business’ time will be spent on trying to recover lost data and investigating the breach with little left for actual business. Employees’ productivity will also take a hit as many systems are put offline for reconfiguration and cleaning.
5. Loss of Customers
Successful phishing attack scares customers away from a business. A UK survey revealed that more than half of consumers stop patronizing a hacked organization for several months after a data breach.
Some 41% of customers no longer patronize businesses that got their data leaked. This effect could haunt an organization for a long time.
6. Financial Penalties
When sensitive customers’ data end up in the public domain, the affected business is held responsible. In addition to the direct monetary loss from failure to defend against phishing, heavy regulatory fines can be placed on an organization for mishandling customer’s data.
The penalties target businesses that don’t follow best practices for protecting their customer’s private data. Violating regulatory requirements such as HIPAA, PCI, and European GDPR may attract heavy fines. The extent of the fines depends on the industry and the scope of the breach.
7. Intellectual Property Theft
A business asset isn’t just money or equipment, intellectual property could even be more important. Intellectual property may be stolen through phishing attacks and could even be the motivation for the attack in the first place.
Heavy investment goes into research and development, new technology as well as trade secrets. When these are compromised, they could setback the business involved and make them less competitive.
8. Loss of Company Value
Phishers can also cost a company a significant part of its market value as a result of the loss of investors’ confidence. Some investors would no longer trust the affected organization and may move their funds elsewhere to protect their portfolio.
A successful phishing attack can have multiple negative effects on an organization. This may include data loss, compromised credentials, ransomware, and malware infestation.
It is pertinent that you prioritize employee cybersecurity education, install advanced security solutions and implement policies that will block phishing attempts and protect your business from its impacts.
If you are interested in discussing options for securing your business against phishing attacks, get in touch with us today.