Think small businesses are safe from cybercriminals? Think again! Cyber-criminals attack smaller organizations as much as they do the larger ones. Small and Medium Businesses (SMBs) are an important part of the national economy contributing trillions of dollars per year. However, small businesses tend to pay less attention and budget smaller amounts for cybersecurity. These factors make them an attractive target for a cybercrime.
A cybercrime involves the use of computers and networks to carry out or facilitate criminal activities. Hackers can engage in various cybercrimes including spreading malware and ransomware, phishing, exposure of private data, and internet identity theft against their target.
The effect of a cyberattack on small businesses can be very devastating as they often lack enough resources to handle issues associated with a breach. Cybercrimes against small businesses can put the company involved out of business. The theft of customer information from a single event can damage a firm’s reputation and destroy the trust of the customers in them. In many cases, it becomes impossible for a business to recover from such an incident.
In this article, we discuss the various devastating effects of cybercrimes on businesses.
1. Operations Disruption
Malware and Trojan worms used by cybercriminals can destroy the normal operation of a company’s website and service by clogging up the network. Some attacks such as a Denial-of-Service (DoS) are deliberately executed to deny legitimate users access to an organization’s online resources. A DoS attack can completely shut down a company’s online service and grind the business to a halt.
Several businesses may be lost by the organization while trying to recover and investigate the attack. Restoring normal operations may be time-consuming and costly.
2. Reputational Damage
The cost of cybercrimes to small businesses goes beyond financial loss. While reputational damage is difficult to quantify, it negatively impacts the business involved. Large organizations with big budgets often struggle to repair their reputations following a cyber incident, SMBs fare worse because customers’ trust is very critical to their survival.
Customers are far less likely to do business with organizations involved in data breach incidents.
3. Asset Loss
Account numbers, credit cards, and login credentials can be stolen during a security breach. Unfortunately, these losses are not covered by banks and credit card companies. The entire burden is borne by the affected business. To cover the losses, a business capital may be depleted. It becomes hard for the affected company to survive or they may be forced to downscale in order to continue operating.
In addition, proprietary information, product design company strategies are other assets that can be stolen by cybercriminals.
Your business can be sued in the case of a data breach. Customers may assume that your organization did not put necessary protection in place to prevent data loss. They may seek compensation via litigation.
Regardless of the outcome of litigations, the cost of defending civil lawsuits against your business can add up very quickly. Your business may also be subjected to heavy fines, especially when you operate in an industry with specialized data protection laws such as HIPAA.
Also, a compromised business may be used by cybercriminals to perpetrate money laundering schemes which may further put the company on the radar of law enforcement agencies.
5. Monetary Loss
It is costly to clean up compromised systems and recover from a cybercrime incident. Such expenses will put a financial strain on your business. The cost to clean up a data breach for SMBs can possibly be well over $50,000.
The effects and costs of cybercrime on a business depend on the scope and circumstances of the attack and the business involved. As cybercrimes become more lucrative and easier to get away with, more attacks are likely to occur against small businesses who have weaker cyber defense and are often unprepared to deal with the aftermath of a security breach.
As a business manager, you should take IT security seriously by conducting regular cybersecurity risk assessments, implement security recommendations to protect your business, and have a recovery plan in place to deal with potential breaches.
Contact us today to discuss IT security for your business and avoid becoming a victim of a cybercrime.