cyber risk

Cyber risks for small businesses: Don’t underestimate the value of your information

The past couple of years has been like a stormy sea to Australia’s small businesses, as many struggle to stay afloat. Unfortunately, the same conditions that are so challenging for our businesses are also the ones where cybercriminals thrive.

According to the Government’s cybersecurity agency, the ACSC, there has been a 60% increase in ransomware attacks against Australian entities in the past year. Untangling the aftermath of an attack on your small businesses can be expensive and stressful, while a data breach can cause significant financial and reputational damage. Yet, Australia’s small businesses remain seemingly unalarmed, questioning ‘Why would somebody bother to attack us?’.

Why do criminals target small organisations?

Small businesses are often prime targets for cyberattacks because they aren’t protected by the same level of security infrastructure as larger companies. Although you might not realise it, your business will have extremely valuable data to offer- such as banking information, payment details and your customer’s personal information.

An increase in home-working to prevent the spread of COVID-19 has resulted in greater cyber risks for small businesses. The sudden shift to digital for many company practices meant a hasty uptake of unfamiliar softwares and systems. For many, the application of flawed software to help workers connect, a lack of employee training in new technologies and insufficient funding has increased vulnerability and therefore the risk of a cyber-attack.

What are the risk factors for a cyber-attack?

Small businesses across all types of industries are vulnerable to security breaches. However, there are a few key areas of vulnerability that could increase the threat of an attack, including:

  • Underfunded or inadequate IT staff: Investment towards the prevention of an attack is often minimal within small businesses but should be a priority.
  • Lack of employee training: Without adequate knowledge and training, your team could unknowingly expose your business to risk by clicking on a phishing email or downloading a suspicious document.
  • Insufficient computer and network security: Unsecured Wi-Fi networks or personal devices, weak passwords or software with outdated security patches will all put you at risk of a security breach.

What’s the impact of an attack?

A cyberattack can severely impact, and be fatal to, your business. The consequences of an attack can cause a snowball effect on all areas of your organisation. Financial losses are a huge issue for victims, whether from the theft of banking information or the disruption of business activities. To recover data and clear your network of subsequent threats, high costs are often involved in getting your business back onto its feet.

Reputational damage following data breaches, leaks, and compromised customer information can be a huge blow. It can be hard for organisations to retain customers’ trust following an attack – and that’s particularly true for small organisations. It’s not uncommon to experience a loss of clients as customer trust becomes impaired.

Cybersecurity tips for small business owners

The damage caused by increasingly sophisticated cyber-attacks is becoming ever-more common. As the number of victims increases across Australia, how can you minimise the cyber risk for your small business?

  • Employee training and education: Your people are your greatest asset but can also be the most vulnerable point in terms of cyber risk. It’s essential to conduct frequent employee training focused on recognising and reporting suspicious alerts and messages.
  • Enhance your network security: Passwords alone are not an adequate line of defence. Ensure all workstations are up to date with the latest security patches, have antivirus installed, are behind a firewall, and that email spam filters are enabled. This also goes for any employees working from home, who should use multi-factor authentication to access work networks from home.
  • Back up all files regularly: If a cyberattack happens, your business’ data could be compromised or deleted. Make it a priority to enable automatic and secure cloud-based data backups. You must also ensure that encryption is used when transferring and storing data, requiring multi-factor authentication for access.
  • Have a response strategy: Always have a plan for the worst-case scenario and create clear procedures to follow in the event of a cyberattack. Designate a response team, conduct test runs to improve protocols and make sure your team know exactly what to do should an attack take place.
  • Stay up to date with recent scams: Remaining educated and aware is critical. You can access the most recent scams impacting business through the Scamwatch website. You can also sign up to the ACCC’s Small Business Information Network to receive emails about new resources and scams relevant to the small business sector.

How cyber insurance can help

In the event of a cyber-attack, cyber insurance can act as a safety net to help cover the financial and reputational costs if your data has been lost, damaged, stolen, or corrupted. Insurance should play an important role in your risk management strategy, helping your small business to stay afloat when times get tough.

Find out how Western General Insurance can help you by contacting us today.