Have you ever wondered how much the cost of a data breach is? Or how the COVID-19 pandemic has affected the security of small businesses? The answers to these questions may surprise you given the latest findings of different organizations.
Business owners may think of postponing investments in their business's security, especially when still starting. Some may prefer to focus more on marketing or product lines for profit. However, protecting your data (online or offline) equates to safeguarding your earnings, and it also prevents future losses.
There are many things to learn about data breaches and their unwanted consequences. Here are five essential things you need to know about security in small businesses.
1. Small businesses lack investment when it comes to their cybersecurity.
If you own a small business, you may think you’re too small to steal from. 82% of small businesses believe they “don’t have anything worth stealing,” according to research from Towergate Insurance.
However, any business, large or small, has products and data that can be sold. Hackers benefit from any information they can get from their victims. This is why investing in a cybersecurity system is a must when it comes to maintaining your company's data.
Think of it this way: if you handle more data than an average person surfing the web, yet you have the same level of security, which one becomes more appealing for the hackers? They would not think twice about getting your company’s data.
This is especially true when you handle customer data. By investing in your security, you also invest in your customers by assuring them their data is not susceptible to data breaches.
According to the 2019 study by Keeper Security and the Ponemon Institute, small- and medium-sized businesses reported an increase in data breaches which climbed to 63% from 58% the previous year. The pattern continues to rise due to the remote work transition brought by the COVID-19 pandemic.
2. Security for small businesses can be as simple as building a firewall and increasing layers of security.
Have you noticed banks and other applications requiring two-factor authentication when logging into their application or websites? This is an example of a simple yet effective way to increase your security layer.
If your small business is still in its initial stages, applying firewalls, installing antivirus, and using end-to-end encrypted applications are enough to secure your business’s sensitive data. Connecting only to trusted networks lessens the likelihood of hackers gaining access to your files.
Phishing is one of the most common data breaches that businesses frequently encounter. Having an official company email prevents entry of spam, scam, and phishing emails that use foreign domains (which are usually in the form of“@___.com”).
Employees can help prevent data breaches if they are trained in navigating through the Internet while using the company’s email address or device.
Most small businesses limit employee access, use data encryption, and require strong passwords as means to increase their security, according to the 2020 survey data of The Manifest.
It is best to hire an IT specialist. This may incur considerable costs, but it will be worth it since your data will be protected from hackers who might attempt to break into your company’s database.
3. Credentials and personal information usually cause data breaches.
Credentials have long been used to access different data entry points with only one username or password.
Using one credential to access a whole database full of your business data is convenient. However, this convenience can lead to that data being accessed by someone else. This is a significant (but overlooked) threat for small businesses that usually keep all their files in a single storage place. It is no wonder that this remains appealing for hackers to breach.
63% of data breaches are due to stolen, weak, or default passwords, according to Verizon’s 2016 Data Breach Investigations Report. To prevent this, you can consider subscribing to a cloud service that offers robust security measures rather than just relying on your credentials or a single password. If you prefer having your files offline, always back them up in a spare hard drive in case of a data breach.
4. Downtime, recovery period, and investigation of a data breach can cost millions per incident for small businesses.
The average cost of a data breach is $3 million for small businesses with less than 500 employees, according to the IBM and the Ponemon Institute 2021 Cost of a Data Breach Report. The amount increases to a $5.25 million average in organizations with more than 10,000 employees.
The cost of a data breach comes not only from the stolen data but also from the duration of the investigation, recovery time, and downtime caused by the incident. It usually takes about a day to recover lost data if security measures are in place. Small businesses without security protocols may take more than 48 hours for recovery.
Losses are cut when backup plans are in place. While investigations are ongoing, backup databases can keep the business operational.
5. The COVID-19 pandemic increased the need for small business security.
The COVID-19 pandemic has caused significant changes. More work is now done online. Since shared online spaces and cloud storage are primarily used for work, data breaches often occur when a company’s database is accessed through compromised security points.
In mid-2020, Verizon’s Data Breach Investigations Report shared “80% of hacking-related breaches and 77% of cloud breaches.” There has also been a 240% increase in the use of unsecured Wifi hotspots, which makes a device susceptible to hackers within minutes of exposure.
The increase in breaches is alarming because small businesses may switch to financing their cybersecurity only after experiencing a data breach. By then, all data may have already been compromised even when retrieved.
Small businesses should give more focus to their security to prevent data breaches. Having protocols, layers of security, or an IT specialist will help in the long run. During the business’s initial stages, simple firewall, antivirus, and data encryption are sufficient for security.
Hackers are skilled in coming up with ways to get your data. This may come in the form of spam, phishing, or through the use of unsecured Wifi connections. Credentials and personal information can also cause compromise insecurity.
Recovery of lost data can cost millions on average, but it can be prevented when security measures are in place. Investing in security minimizes the worry of data breaches. Consider this investment as your way of respecting and protecting the privacy of your employees, company partners, and loyal customers.