Why SMEs and SMBs Fail After A Cyberattack

By Art Gross, President and CEO, HIPAA Secure Now!
Twitter: @HIPAASecureNow

Malicious cyberattacks are increasing every day around the globe. In fact, cyber-incidents nearly doubled from 82,000 incidents in 2016, to 159,700 in 2017. While the media often depicts large corporations as the primary target for cyberattacks, small business are just as likely – if not more likely to be targeted. An article on CSO looks at why small- to medium-size enterprises (SMEs) and small- to medium-size businesses (SMBs) often fall victim to cyberattacks, in many cases leaving them unable to recover.

1. Unable to afford IT staff
With so many key entry points where a hacker can gain access to an organization’s data, it is critical that a proper IT team is in place. Not only is it important to have an IT team in place to implement the appropriate security measures, but it is also necessary to have IT managing and maintaining daily operations of those security systems, which can be a difficult task.

For a company that allows BYOD and is connected to different cloud services, this means the IT department has to protect 4 main security components; the user identity, the device used, the network they’re connected to and the cloud services they’re using. This normally leads to purchasing at least 4 different security platforms.”

While staffing an IT department may not be an issue for large corporations, many SMEs and SMBs simply cannot afford it. In many cases, small businesses may only have a few individuals responsible for managing their IT, and in some instances, may have nobody properly managing their computers and networks. With inadequate resources, it comes as no surprise that cybercriminals are targeting SMEs and SMBs and exploiting their vulnerabilities.

2. Lack ongoing cybersecurity training
SMEs and SMBs often lack the resources to effectively train their employees on security, which is another reason cybercriminals see them as an easy target. If employees are not provided with proper security training, their poor security habits can provide easy access to a cybercriminal. Not only is initial onboarding training important, but ongoing security training is a must to ensure employees are kept up-to-date on current threats and how to mitigate and/or respond to them.

With many security training programs being expensive and out-of-budget for SMEs and SMBs, their employees often go untrained and unaware of what threats are out there. Not only does the lack of training keep employees in the dark about how to spot a potential threat, but it also leaves them unaware of how to respond if an attack occurs, especially if that attack is malware or ransomware.

According to the National Cyber Security Alliance, 60% of hacked SMEs and SMBs go out of business, because they simply don’t know the way forward.”

3. The devastating impact of Ransomware
Ransomware has quickly become a preferred method of attack for cybercriminals. In fact, Ransomware was reported as the fasted growing threat in cybersecurity in 2017. Typically, in a ransomware attack, the outcome favors the attacker rather than the victim. While large corporations may have the funds to pay the ransom demanded by a cybercriminal, SMEs and SMBs typically do not. Even if the ransom is paid, there is no guarantee that the files will be returned to the organization or that those files weren’t accessed by the attacker. SMEs and SMBs are often left devastated by these attacks and in many cases, unable to recover.

4. The internet makes a bad reputation difficult to ignore
It is an expectation that organizations who are serving customers will protect their information and keep it safe. When a company drops the ball in keeping their customer’s personal information secure, the customer often feels violated and seeks financial restitution for the incident. Not only does this exposure of information result in potentially steep monetary costs, but also leads to bad press for the organization. In the age of the internet, bad press can permanently damage a company’s reputation, sending current customers looking elsewhere for service and drive potential customers away.

While large corporations may have the funds to hire legal teams to fight for them in court as well as PR teams to help with the bad press, SMEs and SMBs often do not have that option. Not only do SMEs and SMBs often have to deal with bad press on their own, but also find themselves battling monetary costs associated with fines from the breach.

Loss of private data could also lead to massive fines by authorities if HIPAA, CFPB, GDPR, or other regulations were breached in the attack. Such fines could be absorbed by a large company but devastate a smaller organization.”

The future of cybersecurity for SMEs and SMBs
One advantage that SMEs and SMBs have on large corporations is their ability to make change quickly. While large corporations may have a long formal process to go through to implement change, SMEs and SMBs can typically bypass the complexity and act fast.

SMEs and SMBs can find solutions that fit their needs when it comes to protecting themselves and training their employees.

The fact that a Fortune 500 company chooses to work with a complex and expensive vendor doesn’t mean it is the best fit for an SME. It might just be the best for them, but not a good fit at all for a smaller operation.”

Smaller companies can also use autonomous systems to not only detect security threats, but also assist in mitigating them.

This article was originally published on HIPAA Secure Now! and is republished here with permission. HIPAA Secure Now offers annual online subscriptions to help covered entities and business associates keep up with compliance. Learn more here.