Cybersecurity : one of the biggest challenges for Small and Medium Companies
Cyberattacks are a growing concern for companies, as they can result in significant losses in terms of customers, revenue, and reputation.
Almost one in two companies report having suffered a data breach in the last two years.
Therefore, securing and protecting data has become a major concern, particularly for small businesses and with the rise of cloud computing and remote work.
Lacking the budget to deploy high-end defence solutions, small businesses find themselves in a bind, struggling to find ways to defend themselves.
Especially since many of these companies base their business on data exploitation, it is becoming more and more complex to ensure their prosperity.
Thus, it is exciting to learn about the security risks that Small and Medium Companies (SMCs) face and how they can protect themselves.
The different types of cyberattacks.
Cyber-attacks are diverse and varied, but there are 3 main types that are the most common.
- Phishing: Type of cyber-attack that uses fake emails, phone calls, or messages to trick individuals into revealing sensitive information.
- Malware: A malicious piece of software that harms or exploits computer systems, networks, or devices and can cause damage, steal sensitive information, or hold data for ransom.
- Ransomware: Type of malware that encrypts a victim’s files and demands payment for the decryption key to restore access to the data.
Why small businesses are attractive targets for cybercriminals?
First, because SMCs do not have as many resources to invest in cybersecurity as larger organizations, they frequently have weaker security measures, making it easier for hackers to attack them. They are also less likely to detect and respond to an attack quickly because they lack all of the necessary and recommended tools.
In addition, they store valuable customer and financial data and they are often seen as a steppingstone to access larger and more valuable targets.
It was the case in 2017, with the global ransomware attack of WannaCry. Hackers utilized a vulnerability in older versions of Microsoft Windows, and many small businesses that had not kept their systems up to date were affected. They used small businesses to infect larger organizations, leading to widespread disruption and financial losses.
What are the consequences of cyberattacks for small businesses?
> Operational and financial impact
Nowadays, technical teams are detecting more and more flaws in their cybersecurity and must therefore spend more time and energy on the various problems encountered. However, the cost of resolving incidents is far from theoretical and their impact often exceeds the cybersecurity budget. In addition to business interruption and ransomware, these disruptions are extremely costly for the entire company.
Moreover, business-critical applications experience unplanned downtime and recovery of critical workloads can take a considerable amount of time.
In the event of an attack, expenses can include paying a ransom, losing income due to downtime or data loss, recovering and restoring systems, paying legal fees for violating laws like the GDPR, strengthening security measures to fend off future assaults, etc.
> The reputational damage.
The reputational damage a company faces in case of a cyberattack can be significant and long-lasting.
The company can lose its customer trust. They may be concerned about the safety of their personal and financial information.
It can also jeopardize brand reputation as cyberattacks lead to negative publicity and the public’s perception of the company. That shows there is a lack of security and the company is unstable.
Indeed, there will be less trust in the company’s ability to protect sensitive information, which can lead to less trust among customers, partners, and investors.
Eventually, depending on the jurisdiction, a cyberattack may result in regulatory fines and legal consequences for the company, further damaging its reputation.
> Loss of customers and revenue.
Cyberattacks can lead to a loss of customers and revenue for several reasons.
Firstly, as their reputations suffer, companies under attack are losing customers because they are not considered trustworthy.
Moreover, they can lose their additional value on the market: a loss of productivity, downtime, data loss, and ability to secure sensitive data…. This leads to a willingness from the customers to find alternatives to these companies, which is understandable.
If McDonald's takes an hour to deliver your order tomorrow while Burger King only takes 5 minutes with comparable quality, you will most likely choose Burger King… The same logic applies to software and every kind of product or service.
These consequences can have a lasting impact on a company’s financial performance and ability to do business. That is why it is important for companies to invest in strong cybersecurity measures to prevent and respond to cyberattacks and to communicate transparently with their customers and stakeholders about the measures they are taking to protect sensitive information.
“For every problem there is a solution”.
Let’s now focus on the different solutions small companies can implement.
Solutions for Small Businesses.
Many solutions have been considered and developed for businesses of all sizes to protect them from cyber-attacks. Companies that want to implement these solutions and take a proactive approach to this daunting issue should develop a three-pillared cybersecurity strategy.
1) Technical measures
Before talking about the different technical support, a simple guidance to help patch security vulnerabilities and protect against potential cyberattacks is to regularly do software updates.
The first measure SMCs should deploy is a firewall. It is a network security system that monitors and controls incoming and outgoing network traffic based on predetermined security rules.
Then, they should use antivirus software. It will help detect and prevent malware from infecting a company’s computers and networks.
Afterwards, the company should enforce a data encryption policy. This will enable it to secure its data in transit and at rest, by converting plain text into a coded message.
Furthermore, password management and remote access security can be extremely beneficial in lowering the risk of password-related security breaches and protecting against unauthorized access.
Additionally, companies should think about a backup and disaster recovery plan with clearly defined steps and tools to use when they have an incident, to save time and costs.
There are existing tools that are free and can help to have a first layer of security. For example, Azure Active Directory Free, which is Microsoft’s cloud-based identity and access management service.
2) Employee education and training
Educating the company’s staff on cybersecurity has become more and more necessary in any small business strategy.
It can help to reduce the risk of human error: Employees are often the weakest link in a company’s cybersecurity, as they may unknowingly put the company at risk through actions such as clicking on a malicious link or using weak passwords. Employee training can help educate employees on safe and secure practices, reducing the risk of human error.
In addition, the company must establish best practices. These guidelines will help employees develop their security-conscious behaviours. It could be strong password management, avoiding phishing scams, and identifying potential security threats.
Training can also help staff to stay informed of the latest threats and types of attacks. This is vital as the cyber threat landscape is constantly evolving.
3) Collaboration with experts and specialists
To enforce their cybersecurity strategy effectively, small businesses should work with experts and specialists that have the technical knowledge and experience needed to protect them.
They will help small businesses to stay up-to-date, implement measures to manage their risks and have compliance expertise.
From a human point of view, these measures will give the small business owner peace of mind as they already have to focus on so many other critical tasks.
Conclusion
SMEs must contend with an increasingly complex and evolving threat landscape. A cyberattack can have devastating consequences, including financial losses, reputational damage, and customer loss. They must prioritize cybersecurity and implement a comprehensive strategy that includes technical measures, employee education and training, and collaboration with experts. Investment in cybersecurity will pay off in the long run by safeguarding the company’s assets and ensuring its survival. SMEs can no longer afford to ignore cybersecurity, and being targeted is a matter of when, not if.
About this article
This article has been written by a student on the Grenoble Ecole de Management’s Advanced Masters in Digital Strategy Management. As part of a content creation assignment, students are given the task of writing articles based on their digital interests and disseminating the articles online. Articles are marked but we make minimal changes to the content. Thanks for reading! James Barisic, Programme Director, MS DSM.
