In this article, we wanted to provide an overview of why it is important for Small and Medium Businesses (SMBs) to prioritize cyber threat mitigation.
In an era dominated by digitization, SMBs must recognize the significance of cybersecurity. Despite their size, these organizations are not immune to the ever-evolving landscape of cyber threats, Accenture’s Cybercrime study reveals that nearly 43% of cyber-attacks are on small businesses. This article explains why SMBs should take cyber threats seriously, emphasizing the potentially devastating consequences of overlooking cybersecurity measures and highlighting the critical role of a proactive approach in safeguarding business revenue, operations, clients' data and reputation. According to Verizon’s Data Breach Investigations Report, only 14% of SMBs are prepared for a cyber attack.
SMBs constitute a substantial portion of the global economy. They contribute significantly to job creation, innovation, and overall economic growth. However, their size does not render them invisible to the perils of the digital age. SMBs are increasingly becoming targets for cybercriminals due to their perceived vulnerability and often inadequate cybersecurity defences. We hope the insights below will supply compelling reasons for SMBs to prioritize cybersecurity and adopt a proactive stance against cyber threats.
After working with many SMBs, we observed that there is a set of common denominators that put them in such vulnerable positions; here is our take on that:
1) There are currently more than 5,000 types of cybersecurity technologies available on the market. SMBs are overwhelmed with this large selection and find it difficult to choose a technology that aligns with their business needs. Therefore, business leaders make uninformed or “easy” decisions, which will lead them to a higher chance of being breached.
2) To make it even more complex – Around 3.5 million qualified people are missing in the cybersecurity industry. It's crucial to dispel a common misconception: IT professionals and cybersecurity experts possess distinct skill sets. To illustrate this point, consider a parallel in the medical field: the difference between a family doctor, who is a general practitioner, and a specialized doctor, such as a cardiologist, each has a very distinct skills set. Would you go to a family doctor to treat complex heart issues? Most probably not. Same with IT and Cyber Experts, those two functions are different and should work side by side in organizations of any size; however, in the SMB space, cyber experts are rarely found due to simple “supply and demand issues.” The scarcity of cybersecurity talent drives salaries up; while big guys can afford them, the small guys are left in the cold and must rely on the IT generalist to handle cyber. The result is a higher propensity of SMBs being breached with significantly higher impacts on business.
3) Digital Transformation - Many organizations are moving to the cloud, using SaaS solutions, and embracing hybrid workforce practices. Those solutions are designed for ease of accessibility, which translates to hyper-connectivity, which allows criminals to target any SMBs' digital assets from anywhere around the globe. The issue becomes even more pronounced as new technologies require a completely different set of skills to secure them effectively; having SMBs relying only on IT makes most of the assets moved to the cloud an easy target for attackers.
Cyber attacks have evolved in both complexity and frequency. The threat landscape is dynamic and ever-expanding, from ransomware attacks to data breaches and phishing campaigns. Cybercriminals exploit vulnerabilities in outdated software, weak passwords, leveraging stolen credentials, and human error, making SMBs easy prey if cybersecurity is not prioritized or even sometimes simply out of reach to SMBs. World Economic Forum found that 74% of cybersecurity breaches are attributed to human error.
The grim reality is that 2023 will be a record year in damages caused by cybercrime to businesses around the globe.
SMBs are particularly susceptible to the financial fallout of cyberattacks. Inadequate cybersecurity measures can lead to direct financial losses in the form of ransom payments, data recovery costs, legal fees, costs associated with prolonged productivity loss and regulatory fines. Moreover, the loss of customer trust and reputation damage can have long-lasting financial implications, potentially leading to business closure in extreme cases.
On average SMBs spend between $826 and $653,587 on cybersecurity incidents.
According to Cybersecurity Ventures, the cost of cybercrime is predicted to hit $8 trillion in 2023 and will grow to $10.5 trillion by 2025.
The value of sensitive data, including customer information, intellectual property, and proprietary business data, cannot be overstated. A data breach can expose SMBs to significant legal liabilities, including lawsuits, regulatory penalties, and mandatory data breach notifications. Neglecting cybersecurity may result in costly legal battles that can cripple an SMB's finances.
Cyberattacks often lead to substantial operational disruption. Ransomware attacks, for instance, can render critical systems inaccessible, leading to downtime and lost productivity, usually measured in weeks. The time and resources required to recover from such incidents can be debilitating for SMBs. The inability to serve customers or fulfill orders can result in lost revenue and damage to business relationships.
Building and maintaining customer trust is paramount for SMBs. A cyberattack that compromises customer data erodes trust and tarnishes reputation. Once trust is lost, it can be challenging to regain. Customers are more likely to patronize businesses they perceive as secure and reliable, making cybersecurity an essential element of brand integrity.
Governments worldwide have introduced stringent data protection regulations, such as GDPR in Europe and many other countries, followed by similar regulations. SMBs are not exempt from compliance requirements, and non-compliance can lead to substantial fines. Implementing robust cybersecurity measures safeguards against cyber threats and ensures adherence to regulatory obligations.
SMBs that prioritize cybersecurity gain a competitive advantage, it can be seen as an enabler for doing business. They can assure customers and partners of their data security and integrity commitment, making them more attractive business partners. In contrast, businesses with lax cybersecurity measures may be perceived as liabilities and excluded from potential collaborations.
In conclusion, Small and Medium Businesses should take cyber threats seriously, recognizing that the consequences of neglecting cybersecurity can be financially devastating, legally risky, and reputationally catastrophic.
But there is hope; not everything is gloomy for SMBs - By prioritizing cybersecurity and proactively initiating improvement programs for organizations' cyber posture, SMBs can tip the scale to their advantage. There are efficient ways to tap into the cyber services providers' ecosystem, which can help right-size the cost while getting access to world-class expertise and leading enterprise-grade technologies that will secure current operations and allow safe migration to new digital platforms. Remember, IT and Cyber are complementary functions that need to work side by side to generate maximum outcomes for the organization. In a world where cyber threats are omnipresent, proactive cybersecurity measures are not an option but an imperative for SMBs.
About the Authors of the Article:
Mr. David Chernitzky is a visionary serial entrepreneur and a cybersecurity industry veteran, serving as the CEO of Armour Cybersecurity.
Mr. Chernitzky spent over 12 years in the Israeli Defense forces and working for the leading IT enterprises worldwide, David brings vast experience to client engagements by applying a "no-nonsense approach" to cybersecurity. While detail-oriented, Mr. Chernitzky helps clients build an accurate big picture of their business and evaluate business risks related to cyber threats and practical mitigation strategies. David successfully leads multiple cyber defence engagements with clients across different industries and geographies.