Small businesses warned to keep guard against hacking threats
Cyber security is becoming a key issue for many small businesses, as those with reduced revenue can often ill-afford the costs associated with a recovery.
A rise in the use of ransomware is a particular problem, as firms can see their entire network rendered useless and then require a great deal of finance to rectify the issue.
In cases where cyberforensics teams are needed, the bills can amount to anything between $20,000 and $50,000 (c. £15,000 to £38,000), according to Michael Carr of Argo Group International.
While costs will vary dependent on the size of the company and its network, it is a growing issue according to the Verizon 2016 Data Breach Investigations Report, who said financial espionage was a motive for 89% of breaches.
Checkmarx, which specialises in application security, has estimated that cybercrimes will cost businesses more than $2 trillion (c. £1.5 trillion) annually by 2019, highlighting the scale of the problem.
Despite this, many smaller firms still lack the necessary protection, meaning both the data that they hold, their finances and their reputation could be under threat.
Costs to a company can include, but are not limited to, business interruption or lost work, regulatory fines or ransomware demands to allow a network to get back active.
For smaller businesses, being the victim of a hacking could also have a severe impact on their reputation – although it is difficult to put a financial value on this, it is often difficult to win back custom if the consumer has lost faith in the firm.
In extreme cases, a business could be left facing administration or the need for alternative recovery methods.
The time in the immediate aftermath of a cyber-attack can also be very costly, particularly if a business loses the means of processing transactions.
This, coupled with other long-term negative effects, can have the power to cripple a small business, damaging its cashflow and ultimately impacting on its bottom-line.
By Phil Smith