SMBs lose around $38,000 in every cyber-attack

Cyber Attacks have been rapidly increasing these days due to the enhancement of advanced technology. Many are facing such attacks that are leading to greater financial loss. With this cyber attacks, most of the people are suffering a lot including SMBs. SMBs are the Small and Medium Businesses who are dropping due to massive cyber attacks.

According to a study by Kaspersky Lab and B2B International, the amount of financial loss suffered by small and medium businesses as a result of cyberattacks continues to grow. In 2015, the damage from one cyber incident averaged $38,000. That sum includes the cost of calling in specialists to clear up the after-effects, missed business opportunities and losses caused by downtime.

As a rule, market penetration and financial stability are the main priorities for small business owners, who pay little or no attention to information security. As a result, their neglected IT infrastructure becomes a prime target for cybercriminals.

The study found that in the last year around a third of small and medium businesses suffered downtime and missed business opportunities, and 88% of them had to turn to third-party experts for help. On average, the latter accounted for about $11,000 of a company’s expenses. Lost profits, accounted for $16,000, while reputational losses – the damage to a company’s image – was estimated at more than $8,000, according to the respondents.  

Every small or medium business faces the risk of incurring this scale of loss. The study shows that almost all organizations (90%) were subjected to external threats at least once during the year, and 73% of respondents encountered internal threats such as software vulnerabilities, or the risk of employees losing mobile devices or causing data leaks.

One of the key reasons for the high cost of cyber incidents is the fact that, if not prevented, cybercriminals gain access to sensitive corporate information. More than a third (39%) of companies confirmed they have lost confidential data as a result of a cyberattack.

"When launching their latest venture, entrepreneurs need to carefully consider their investment and every aspect that could affect the company’s profit and reputation. That’s why it’s important to remember that any automation of business processes is associated with information security risks. The study shows that the potential losses greatly exceed the cost of security solutions, so we strongly recommend thinking about your company’s information security in advance," said Konstantin Voronkov, Head of Endpoint Product Management, Kaspersky Lab.

5 costly consequences of SMB cybercrime:

The following sections describe the types of costs that could be incurred by an SMB in the wake of such an unhappy event.

1. Business lost during attack

A security breach often means shutting down the SMB's electronic operations for some period of time. An online retailer subjected to a DoS attack could be shut down for several days or weeks while determining the attack's origin and taking corrective action.

2. Loss of company assets

Bank account numbers and passwords stolen during a breach can cause theft of account funds. SMB owners may wrongly assume that banks will cover the loss, as do consumer credit card companies. In fact, an SMB will lose any stolen funds, which could cause a business to lose its working capital.

3. Damage to reputation

Another cost that's difficult to quantify is reputation damage after an attack. This scenario could be worse for an SMB. For example, consider a resort operator that relies heavily on its website to attract new customers, book reservations and maintain its brand. If that site is hacked and infected with malicious links, it will be quarantined—placed in a "sin bin”—for a fairly long period by search engines, making it harder for customers to find the website.

Even after the operator resolves the hack, it could take months for the resort's virtual reputation to be restored. And that's on top of losses in revenue and good will from customers affected during the attack.

4. Litigation

SMB's aren't likely to be sued if their customers' information is stolen unless they failed to implement reasonable protection measures. In the Target case, for example, consumers, and the banks that held their credit cards, filed class action lawsuits.

How Can You Protect ?

The first step to protecting your small business is to increase your data security budget. You don’t have to spend millions to create a successful strategy that protects your information and the information of your clients. On average, it takes companies six months to realize they’ve been breached, so by taking a proactive approach you can cut down on the potential damages and limit your risk.

You should also be aware of the risks to your company. Oftentimes, these breaches occur when employees fail to observe proper security protocols, including secure passwords, downloading files online, and phishing scams. The use of mobile devices for business purposes only increase the risk to small businesses. Have a plan for each of your risk factors, allowing you to respond to them should problems arise.

Even if you don’t have the budget to keep a full-time IT specialist on staff, you can invest in security software or remote services, and thoroughly train your staff to recognize threats when they see them. This proactive approach is both affordable and dramatically reduces the risk of cyber attacks on your small business.

Though small businesses are finding themselves increasingly in danger of these devastating attacks, there are ways that business owners can protect themselves and their company. By planning for the worst, you can keep your small business safe from cyber threats.