As businesses of all sizes become increasingly reliant on digital data, workplace data breaches have become more common, and as a result, have gained widespread attention. In this post, Steve Thomas, Finance and Project Based Accounting Expert at The Access Group, takes a look at cyber security and the potential costs businesses could face.
Cyber security is a big talking point for all SMEs, and the impact can be deadly to any business, with more than half of SME businesses closing operations within six months of an attack due to not being able to recover from the financial repercussions.
The financial and information industry, in particular, is an attractive target for hackers due to the nature of business. Processing and handling large purchases and financial transfers on a regular basis leaves companies at risk – especially without an adequate malware software solution in place. Nowadays it is impossible to understand the digital transformation of businesses and organisations without cloud computing.
Time moves quickly and everything has become increasingly digitised, so it is vital for business leaders to face the threat of cybercrime and focus attention on the risks and consequences of a potential attack. The “cloud” is just a server where you store the data, applications and software that you can access from any device, as long as you have an Internet connection. One advantage of cloud services lies in accessibility, and many large purchases and financial transfers are conducted digitally, meaning stronger security measures need to be adopted in order to reduce the risk or threat of a data breach.
As John Chambers, the previous CEO of Cisco once said: “there are only two types of companies: those who have been hacked and those who could be”, and small businesses are no exception to this. No matter what size, a business is at risk of several cyber security attacks, with the most common including:
- Malware and viruses
- Phishing
- Ransomware
- Password hacking
Having said that, there is a lot that business owners can do to help protect their business, such as:
- Firewalls
- Cloud hosting for key systems
- Use secure on-site Wi-Fi
- Staff training to increase awareness of cybercrime
- Install email threat detection
What damages and repercussions can a data breach cause?
Currently, £22,700 is the annual average cost for businesses that have lost data or assets after being victims of a cyber attack. This amount would be a drop in the ocean for a multinational, but for SMEs, micro-businesses and sole-traders, it could be the difference between being able to continue trading and going into administration.
Small business owners are relatively easy targets for cybercrime as more often than not, they don’t have the budget for a full-time IT employee – or are unaware of the importance and benefits of investing in this type of professional. In this day and age, it is advantageous to create room in the budget to protect your business, cash flow and assets against cyber risks as money is not the only thing at risk – 89% of SMEs reported that a cyber security attack impacted their reputation negatively while 30% reported a loss of clientele.
With the correct security measurements in place and eliminating the risk of a data breach, thousands of pounds could be saved and invested back into the business. £22,700 is a lot of money for an SME, and could fund various assets such as 19 used Ford transit vans for your workers and fleet, 1,305,565 cups of tea to fuel your team, or even 19 years worth of cyber security prevention.
One thing is for sure, the costs of cyber security breaches can be substantial. What would you spend £22,700 on?