Cybersecurity should be a focal point of small businesses in 2022 and beyond. Annually, reliance on data storage, the Internet and online sales and booking are increasing. However, 43% of small businesses don’t have a plan to protect against cyber-attacks.
As a managed service provider offering cybersecurity in Miami, we see firsthand the importance of protecting against cyber threats.
The true cost of cybercrime to small businesses is often underestimated by owners and stakeholders that don’t understand the depth of these breaches. A few of the costs associated with these crimes are:
Monetary Value Cost of an Average Cybersecurity Breach
Every security breach is a major concern for businesses, but your dependence on data will dictate the true costs. For example, a small plumbing business that doesn’t rely on their own internal data much will have a lower cost during a data breach than a major tech firm.
The typical data breach for businesses that have less than 500 employees is $2.98 million.
IBM compiled the report in 2021 with insights from 537 data breaches. In the 17 years that the report has been running, this past year had the highest cost of average breaches recorded. The main factor in rising breach costs was the introduction of remote work due to the COVID-19 pandemic.
In fact, the data shows:
- $1.07 million higher cost for breaches involving remote work
- Fewer costs when only non-remote workers are involved
A major reason for these higher cybersecurity costs is that companies do not have 100% control of their workers' devices and networks with remote work. While the right procedures and protocols can help limit these increased risks, many businesses haven’t put measures in place to help mitigate these risks.
However, non-data breaches also exist in the world of cybercrime.
Hiscox reports that the average small business has spent around $25,600 in financial costs related to cyber-attacks in the past 12 months.
Slow Cloud Migration Impacts Containment
Cloud migration is often more cost-effective for small businesses that aim to store data. These solutions reduce the need for:
- Infrastructure investment
- IT teams
The report suggests that the modernization strategy of businesses plays a major role in containment. In fact, businesses with significant cloud migration, contain their data breaches 77 days faster than those not relying on the cloud.
Cloud service providers have internal teams that routinely secure their networks and ensure that the best security practices are in use. Small businesses that lack the budget and cybersecurity teams necessary to contain threats will pay more in the long-term if a threat occurs.
The most common breaches involve compromised credentials.
Roughly 1-in-5 data breaches were a result of someone’s credentials being compromised and a hacker using this information to gain access to the business’ system.
Unseen Costs Exist, Too
Estimating the true cost of a cybersecurity failure is difficult because there are collateral consequences that impact the business, too. For example, businesses may lose brand trust and loyalty.
Customers may no longer trust the business’ practices, and contracts may not be renewed out of fear that the right security measures aren’t in place.
Small businesses should integrate standard cybersecurity measures to help lower the risk of threats and protect against major financial losses.