Keeping yourself updated of the latest cyber security stats and figures will help you protect your business and its assets.
Small businesses represent a major force in the U.S. economy. More than 27 million small businesses in the U.S. generate about 50% of the country’s gross domestic product (GDP). As a business owner, you create opportunities for people to achieve financial success and independence. You also provide jobs for other people.
Small businesses also complement larger businesses. They provide them with services and products to sell. Many small businesses and medium businesses team up with enterprises and sell their products.
They deserve no less when it comes to cyber security. Yet, many small business owners lack a clear awareness of cyber security threats. They seem unfamiliar with their vulnerability to these threats. Worse, they appear unconcerned about the potential consequences of the threats.
Small businesses don’t feel they are prime targets of cyber criminals. Cyber security is a low priority item for them. Studies after studies have highlighted these realities.
What is a small business?
Generally, a business is defined by how much money it makes in a year and the number of people it hires. Some business organizations define small business with different sets of criteria.
The Organization for Economic Cooperation and Development (OECD) defines a small business as one with 50 or fewer employees. The Ohio State University’s National Center for the Middle Market (NCMM) defines it as one with less than $10 million in annual revenue.
The U.S. Small Business Administration (SBA) defines small business as a privately owned sole proprietorship. It may also be a partnership or corporation generating revenue ranging from $1 million to over $40 million. It may have between 100 to over 1,500 workers. This definition varies according to the business’ industry classification.
For purposes of this blog, we will consider the definition of the SBA.
It is important that you know the classification of your business. Government offers benefits your business qualifies for. But you also need to know the regulatory obligations you have to follow in the conduct of your business.
Why are SMBs more vulnerable to cyber attacks?
Cyber attackers are capable of attacking major corporations. So they can more easily attack small businesses. But small businesses think they are unlikely targets of cyber attacks. They think they’re too small to catch the attention of cyber criminals.
That is not the case.
Verizon’s 2020 Data Breach Investigations Report (DBIR) showed otherwise. The report found that one in three breaches involved a small or midsize business. About 60% of these businesses cannot continue doing business within half a year after an attack. This is an alarming consequence.
So why are small and medium businesses so vulnerable to cyber attacks?
Attackers use small businesses as a way to get into the systems of larger corporations
Businesses, big and small, are interconnected with each other. Attackers know this and they leverage this environment. Larger businesses are more difficult to penetrate than smaller businesses. Big businesses have the resources to protect their systems from a cyber attack. A small company’s total spending on cyber security is never enough to prevent breaches.
Cyber attackers have found ways to use small businesses to get into the larger systems
They first get through the supply chain, such as third-party contractors. They compromise small businesses that have connections with bigger ones. Then the criminals find their way into the networks of the bigger companies through these smaller companies.
The criminals used the stolen credentials to penetrate the Target network. They probed vulnerable machines to exploit. And they were able to home in on the point of sale network as the weakest point.
They stole 40 million debit and credit card numbers and around 70 million personal records.
Small businesses lack resources to protect themselves from cyber attacks
Many small businesses have no dedicated IT support that handles cyber security. It’s likely done by someone wearing different hats in the daily operations of the company.
Also, KEEPER and the Ponemon Institute published a global risk report on cyber security. More than 35% of small businesses have no dedicated staff that takes care of cyber security.
Covid-19 made the situation worse. Small businesses had to adopt remote work without the proper safeguards. About 40% of those companies reported a 40% increase in cyber attacks.
Small businesses lack security measures for remote work
The pandemic caused the quick adoption of remote work. But small businesses were not prepared due to insufficient resources. They could not cope with new security measures that remote work required.
In fact, there is a 600% increase in malicious emails amid the Coronavirus crisis. And a cyber attack is happening every 39 seconds worldwide.
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Common cyber security stats every small business needs to know
We’ve put together some of the latest cyber security stats small business owners shouldn’t ignore. We hope these cyber security stats will help you make better cyber security decisions for your business.
1. Small business cyber attacks increased by 424% in 2020
The increase is partly caused by the rush of small businesses to adopt remote working. But they did so without the security safeguards for their workers and the network. This provided cyber criminals more attack vectors to exploit.
Ransomware attacks rose in numbers. Cyber attacks also increased because companies give in to ransom demands. They are willing to pay ransom because they want to get their data and systems back. Small businesses don’t have resources to spend on sophisticated cyber security mechanisms. They would rather pay ransom than go out of business.
The rising popularity of cryptocurrency is also driving ransom-based attacks. Criminals prefer cryptocurrency because it is less regulated and harder to trace. It allows more anonymity in transactions that are criminal in nature.
2. About 43% of cyber attacks target small business
The Verizon 2019 Data Breach Investigations Report showed that 43% of small businesses experienced data breaches. Large enterprises are beefing up their cyber security systems. And so attackers are turning to easier targets, particularly small businesses. But many business owners still believe they will be able to respond to a cyber attack.
According to a recent BullGuard survey, 58% of small businesses don’t think their businesses are likely targets of attackers. About 43% don’t have a cyber security defense plan. And 50% don’t provide employee cyber security training. Cyber attackers are watching. They will strike at unprepared small businesses at the first opportunity.
3. Small businesses spend an average of $7.68 million per insider-related cyber attack
Insiders include employees, partners, and customers doing business with a company. They are the most vulnerable victims in an organization.
An IBM report revealed the cost of insider threats in 2020. The average cost of a cyber attack caused by a negligent insider is $7.68 million per incident. Of the 4,716 incidents reported in 2020, carelessness of insiders caused 2,962 of these.
Remediation costs and fines add to the costs. Downtime is also an expensive consequence. It takes an average of more than two months or 77 days to contain an insider threat.
4. Human error caused a little less than 90% of all data breaches
Employees’ mistakes caused 88% of data breaches. This was reported in a study by security firm Tessian and Stanford University Professor Jeff Hancock. The study also highlighted that almost 50% of respondent employees admitted to making an error. Such an error could have led to cyber security issues for their company. Other significant findings include the following:
- 34% of male respondents to a phishing email clicked on a malicious link compared to 17% of females
- 57% of remote workers are more distracted when working from home
- 43% of employees click on phishing emails because they think these are legitimate
- 41% of employees open phishing emails because they think they come from trusted sources
5. About 66% of small businesses experienced a cyber attack in 2019
More than two-thirds of respondents encountered a small business cyber threat in 2019. This is revealed in a research report sponsored by Keeper Security, Inc. and conducted by Ponemon Institute.
In the same report, 69% of respondents claim that 61% of the attacks were more targeted and severe. An estimated 60% were sophisticated. Mobile devices, laptops, and IoT devices were the most vulnerable attack points.
6. 30% of small businesses reported phishing as their top security threat in 2019
Verizon’s 2020 DBIR report reveals phishing is the top security threat for SMBs. It’s followed by stolen cards, stolen passwords, and misconfigurations. Ransomware and brute force hacking came next.
7. 43% of small businesses don’t have a cybersecurity defense plan
A 2020 BullGuard report revealed an alarming number of small businesses in the US and the UK are not ready for a cyber attack. About a third of SMBs with 50 or less employees use free consumer-grade security systems. A fifth use no endpoint security at all.
Small businesses are not exempt from cyber attacks. In fact, they are popular targets because they don’t focus on security.
8. 70% of small business employees had their passwords stolen
70% of SMBs had their employee passwords stolen or lost in 2019. 63% experienced a data breach caused by a negligent employee, partner, or contractor. And 54% have no idea of their employees’ password practices. These are revealing information from the 2019 Keeper Report.
What do all these data breaches mean? They mean that many businesses are not prioritizing security. They think they are unlikely targets for attacks.
9. 86% of data breaches against small businesses are motivated by money
Eight in 10 data breaches are financially motivated. This data comes from the 2020 DBIR report. Criminals also attack small businesses for espionage, grudges, and — get this — for fun.
10. Cloud- and web-based applications were prime targets for cyber attack
The Verizon 2020 data breach report revealed that attackers target small businesses. They use cloud- and web-based applications and tools to launch their attacks. Phishing is the biggest threat for small businesses, followed by stolen credentials. Attackers also target sensitive information, medical records, and financial information.
Why is cyber security important for small businesses?
Cyber security is an essential part of small business operations. Large businesses have more resources to invest in cyber security programs. Small businesses may not have that luxury.
If you’re a small business owner, you don’t have to invest in expensive security packages. Instead, assess your needs and match your budget with those. Many managed service providers can tailor solutions for your cyber security needs.
Here are the benefits your small business will get from a cyber security plan:
Protects your network from cyber attacks
Having a security plan in place protects your computers and networks. You must update your antivirus and anti-malware software. Firewalls are the first lines of defense against cyber attack attempts. With firewalls, you can prevent data security breaches and sensitive data theft.
Develops a cyber security culture in employees
Human error is a major cause of data security breaches. We’ve seen that in the latest cyber security stats. Without proper cyber security training, your employees can fall victim to cyber attacks. Instead of being part of the solution, they become liabilities.
Keeps crucial data backed up and protected
Customers entrust their information to companies and they expect them to be safe. You have your own data to protect. Data critical to your business must not be lost. If it is, it must be recovered as soon as possible. Backing up and restoring data is one function of a cyber security strategy.
Controls access to the network
A good cyber security practice is to limit access to resources and files. Assign user accounts, passwords, and access rights depending on the employees’ roles. Locking computers and other IT assets can also cut theft or damage.
How can you protect your small business from cyber attacks?
Covid-19 makes safeguarding data all the more challenging. But you need to do it to protect your business and thrive, or at least survive. Here are some of the ways to do that:
- Use firewalls, antivirus, and endpoint security solutions.
- Backup your data.
- Encrypt important information.
- Use multi-factor encryption.
- Use two-factor authentication.
- Use passphrases instead of weak passwords and manage them well.
- Restrict use and access to accounts with administrative privileges.
- Monitor use of computer equipment and systems.
- Develop incident response and disaster recovery plans.
- Create, put in place, and monitor cybersecurity policies to guide employees.
- Train your employees to be safe online.
- Consider getting cyber security insurance.
- Get updated on the latest cyber security news and statistics.
Our final thoughts: The small business sector is a driving force to the economy of a country. As a small business owner, you need to know and analyze cyber security stats to protect yourself from scheming criminals. Doing so makes you better able to protect you data and assets. It also lets you fight off and recover from cyber attacks.
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