There is no denying that cybercriminals love targeting small & mid-sized companies. According to an article from SC Magazine, SMBs essentially make the perfect target for their illicit activities. That’s because these companies don’t have enough resources to dedicate to cyber security, but still have enough money and data to make the criminal activity worthwhile.
And with SMBs in the crosshairs of hackers, it should come as no surprise that each day in Australia businesses fall victim to cybercrime. In fact, nearly 50 percent of SMBs in the country suffered an electronic attack according to McAfee. The good news is that obviously not all of those attacks were successful. However, the fact that almost one out of two small organisations was attacked means it is not a case of if your company is next, but a matter of when.
Despite this information, SMBs continue to skimp on security firmly believing they are not big enough to be threatened by cybercriminals. That simply is not the case and the latest cybercrime trends reveal that hackers are creating sophisticated attacks designed with SMBs in mind.
If small business owners were to conduct a cost-benefit analysis of not upgrading IT security systems, the result would be shocking. Apart from avoiding the immediate costs of the improved security, there is no real benefit of putting it off. Let’s take a look at the 5 costly consequences of SMB cybercrime in Australia.
1. Goodwill disappears
Most SMBs spend years and decades building relationships with customers that are based on trust and goodwill. Unfortunately for companies who are the victim of a cyberattack, these can disappear faster than they can imagine. That’s because most clients feel violated by the recklessness of a business, which would allow their personal records and information to ever be placed in such a position.
And while this may seem harsh, their livelihoods have been put at risk should credit card details or other confidential information be stolen during the attack. Of course this cost isn’t one you can measure, but that does not mean it should be completely dismissed. A lot of companies that have their data stolen assume clients will understand only to find them upset and unwilling to work with them again.
2. The high-tech scarlet letter
In the weeks and months following a cyberattack, SMBs will have to deal with the backlash and stigma that comes from suffering such an indignity. Sure, a local construction company that falls victim to a cybercrime isn’t front-page news. But in today’s world, news and information travels rapidly through social media. Customers vent their frustrations via Twitter and may leave nasty reviews on Facebook, which is there for all to see. Potential customers will see this information and be less likely to want to associate with an SMB that is recovering from a cybercrime. This means revenue will ultimately suffer. It can take months and sometimes years before the shame passes and profits return to normal levels.
3. Lawsuits and fines
As the dust settles after a cyberattack, the legal fallout will begin. In 2014, the Australian government passed updates to the Privacy Act that saw the amount of fines increased for businesses that suffered a data breach but failed to take reasonable steps to protect personally identifiable information. These fines vary depending on the industry and the amount of information stolen, but even the smallest one is by no means a slap on the wrist.
And companies that fail to protect information also open themselves up to lawsuits from individuals who had their data stolen as part of the attack. What’s more, you are still liable for damages regardless of the cause of the breach. This means there is literally no excuse or reason a court will accept to justify the cause of the data breach.
4. Resources must be shifted
In the wake of a cybercrime, there are a number of obligations a business must follow including the notification of individuals affected by the attack. In order to do this, most SMBs will either have to redirect manpower to cover additional responsibilities or outsource some of these duties to trained professionals such as a call centre.
The cost of extra overtime or the addition of temporary staff adds up quickly and can see a business burn through its cash reserves fast if not monitored. These extra expenses may also force an SMB to scale back current operations or postpone future expansion plans in order to reduce costs.
5. Security upgrades
The biggest irony of a cyberattack and is that in the aftermath of it all, the company that fell victim will end up having to pay for all of those security upgrades they balked at in the first place. In fact, they might even have to put additional protections in place just to assuage the concerns of worried customers. While it may seem like a cruel twist of fate, it is the reality most SMBs face after a cybercrime.
Before any of these IT security measures can be put into place, a computer forensics expert will need to analyse your systems to help identify where vulnerabilities are located. This process can take days or even weeks depending on the type of attack and hiring this expert is another expense you will need to factor into everything.
The Director of Empower IT, Salim Sukari says, “While SMB owners may think IT security is a luxury, this could not be further from the truth. While the initial costs of improving security may seem like a lot, it is relatively cheap when compared to all of the expenses you’ll be accountable for should your organisation fall victim to a cybercrime. Fines, loss of revenue, possible lawsuits and redirecting of company resources are all distinct possibilities after a cyberattack. And you will still have to pay to upgrade your IT security anyway, which means the initial benefit was short lived.”
The costs of cybercrime for an SMB can add up quickly. The best way to avoid this happening to your organisation is to put the proper protections in place.
Contact Empower IT today for more information on how you can do this. Our team of security experts will help your SMB avoid the troubles cybercrime can bring and ensure your profits and confidence remains high.