2021 has been another bumper year for cyberattacks on businesses and the worrying trend shows no signs of slowing down anytime soon, with Cybersecurity Ventures predicts that cybercrime will cost businesses worldwide an estimated $10.5 trillion per year by 2025.
Despite all the warning signs, many businesses are still underprepared for a cyberattack, with the DCMS Cybersecurity Breach Survey for 2021 reporting that the number of companies deploying security monitoring tools has dropped (35% in 2021 vs. 40% in 2020) and fewer companies are undertaking user monitoring (32% in 2021 vs. 38% in 2020) .
Essentially, businesses as a whole are less aware of the security vulnerabilities facing their employees and departments, despite the ever-growing threat.
Related: Protect Your Business Against Cyberattacks with the best antivirus software.
For a business, a cyberattack is not just a loss of data, it can also have lasting effects on operations and damage its reputation for years to come. Here are some of the ripple effects that a business can suffer if faced with a cyberattack.
Service interruption
A cyberattack can affect your business by disrupting your services, which can potentially lead to lost productivity across your organization and cause real-world repercussions.
We saw this recently with the ransomware attack on James Hall and Company, which provides wholesale and IT services to UK retailer Spar. The resulting attack caused the closure of card machines in 600 stores, and even led to the closure of some stores be forced to close.
Businesses should also be aware that they could fall victim to a Distributed Denial of Service (DDoS) attack, in which bots are sent to spam a high-traffic network until it can no longer to process legitimate requests from customers and users.
This disruption can prevent customers from accessing your website and, in some cases, can prevent the influx of new traffic and turn away potential customers.
Damage to reputation
As a business, it is essential that you have the trust of your customers above all else. Consumers will struggle to do business with an organization that has failed to protect their data, and this fallout can lead both current customers and future prospects to look elsewhere.
A investigation from PwC revealed that 87% of consumers are willing to walk away and take their business elsewhere in the event of a data breach. If your organization is not entrusted with a customer’s data, it is very likely that your company will struggle against a company that can handle their cybersecurity situation.
Even once the situation is resolved, the backlash can continue to have ramifications for your business’ reputation, with negative comments and reviews on social media potentially becoming a regular occurrence.
If your company’s breach is particularly damaging and is reported in the press, your search engine rankings are also likely to be affected, as news networks have higher authority in the SERPS (search engine results pages). of research).
This means that anyone searching for your business name on Google will be presented with damaging stories of data attacks and be less likely to choose your service. Businesses should be aware that cyberattacks have the potential to erode user relationships to the point of no return.
Financial loss
Although companies are aware of the financial consequences of a cyberattack, they may not fully understand the potential magnitude of the costs that the damages could incur.
When data is targeted, it is very likely that the full extent of your IT team will need to be deployed during the response and recovery phase of a cyberattack. Depending on the size of your organization, increasing work requirements can be costly, as you may need to increase expenses for any additional work hours. Once the data has been retrieved, there is also the cost of the investigation to consider, which increases further if external auditors or consultants are engaged.
As mentioned, a cyberattack can lead to an indefinite disruption of service in all areas. The inability of customers to make purchases is bad enough for finances, but it’s also possible that employees can’t access systems and, in turn, won’t be able to generate revenue.
If the cyberattack is severe enough to cause significant damage, a company may even suffer a decline in its valuation. If your reputation suffers badly from an attack, it can lead to disheartening financial forecasts.
Legal issue
Privacy laws and data protection laws require your business to ensure the security of all personal data processed within your business, whether it is employee information or customer information. If these laws are not followed, your business could also face fines and regulatory penalties.
The General Data Protection Regulation (GDPR) has been in force across the EU since 2018, which has the power to administer finesper violation, up to 20 million euros or 4% of a company’s global annual turnover for the previous financial year.
Firms that have faced penalties in the past include Google and WhatsApp, which were fined €50 million and €225 million respectively, but the biggest penalty to date has been against Amazon in 2021, who had to pay up to 746 million euros due to poor management of personal data accumulated through cookies. Businesses need to understand that they have a legal responsibility to protect their customers’ data or face financial penalties that could be potentially crippling to their organization.
Final Thoughts
Dealing with cyberattacks is an inevitable part of businesses of all sizes, but if your organization has a thorough security strategy in place, the effects of these attacks are minimized.
A common mistake companies make when selecting a strategy is believing that there is a one-size-fits-all solution, which can often leave areas of your organization exposed.
The weakest link in any organization’s security chain is the staff, and ensuring your employees have the proper training will go a long way in keeping your operations secure.
Taking the time to regularly review cybersecurity protocols within your team will give your organization confidence when working with sensitive data. If you work remotely, checking work devices and having security technologies in place, such as firewalls, VPNs, and anti-malware software, helps prevent attacks that seek to exploit security vulnerabilities that do not take into account modern work requirements.
Finally, having a backup solution in place will give you peace of mind that your data is accessible in the event of a breach.
Should the worst happen, such as an outage to your business, having a disaster recovery plan in place means that all the data you manage will remain secure for the duration of the outage and give your organization the best chance of resuming services in a timely manner.
Neville Louzado is Sales Manager at Hosting managed by Hyve.
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