Hacking is Killing Small Businesses: The Devastating Effects of Cybercrimes to SMEs

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In August 2014, hundreds of private photographs of celebrities, mostly women, were stolen by hackers from online storage accounts and were leaked all over the internet.

It was one of the biggest scandals within the technology industry ever. Apple vehemently denied that the breach was caused by a flaw with the iCloud. The company instead blamed weak passwords for the theft.

However, the event still negatively impacted the tech giant. Immediately after reports of the hacking appeared online and in print, stock prices plummeted. The company received intense criticism from the public.

Apple eventually got past the scandal, but if it happened to a small to medium-sized enterprise, it would have devastating consequences.

Cybersecurity for Businesses

Businesses that operate online in any capacity should have measures in place to prevent cybercrimes. This would involve acquiring tools and hiring experts to ensure that your network is safe from prying eyes.

One way of securing your network is through penetration testing or pen testing. Hackers are finding new ways to attack unsuspecting targets by the minute. You want to know, as much as possible, every possible hole in your network that hackers can exploit.

With pen testing, cybersecurity experts will purposefully attack your network to reveal vulnerabilities. It simulates a real cyberattack, but it would not put your business in peril.

Running vulnerability scanners will spot any points of entry that hackers can use to access your data. It will assess your security from b outside and inside your network.

Finally, updating your tools and software will prevent cyberattacks. Every update contains a patch that fixes any vulnerabilities that the tools and software may have.

Hackers Targeting Small Businesses

Having cybersecurity measures in place, as you may expect, costs money. Although it is worth the investment, many businesses either cannot afford it or would rather spend their budget on something else.

According to statistics, only 14% of small businesses have made steps toward protecting themselves from cybercrimes.

Yet, nearly half, 43% to be exact, of cyberattacks are targeting small businesses. Phishing, a strategy wherein the hacker pretends to be someone else to extract sensitive information from the victim, is still the most common type of attack, followed by web-based and then general malware.

Ransomware, too, is fast becoming a widespread problem. During a ransomware incident, users are locked out of their devices. They are ordered to pay, usually through cryptocurrency, in order to regain access.

A Very Real and Expensive Threat

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Without appropriate cybersecurity measures in place, small businesses are not safe. More small businesses are being targeted and becoming victims of cybercrimes.

According to Hiscox, an insurance carrier, more than half of all small businesses have already experienced a breach in security. It also does not happen just once. About four in 10 small businesses have experienced multiple incidents.

On average, cyberattacks are costing businesses of all sizes about $200,000 per incident. Major companies may be able to afford to lose that amount of money and gain it back in no time.

However, small businesses do not have that kind of luxury. Once they are hit, they may not survive the fallout. In fact, about 60% of businesses that becomes a victim of a cybercrime closed their doors permanently within six months of an incident.

A Tarnished Reputation

The financial cost of the incident does not stop there. If a small business becomes a victim of a cybercrime, it will have to face the loss of trust from consumers as an additional consequence of the incident.

A breach exposes sensitive customer information. Every online transaction involves trust. When a customer makes a purchase, they trust the company with their personal and financial information. If this data leaks, it puts customers in the line of danger, too. Their credit card information may be leaked on the internet for bad actors to use however they want.

If this happens, it will be difficult to win back the trust of the public.

Just look at what happened to Equifax, a credit rating agency. When the data of 143 million Americans were stolen in 2017, it sparked so much anger that the agency became one of the most hated companies in the United States.

Cybersecurity is neither easy nor affordable. However, in the age of the internet, it is a necessary expense. It ensures that the business can protect its data and its customers from cyber criminals lurking all over the web. Although the upfront and upkeep costs may be expensive, it would not be as bad if you compare it to what you would lose if your business becomes a victim of a cyberattack.

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