In an increasingly digital world, the risks and threats to your business have evolved. The potential risk of sensitive customer information falling into the wrong hands is high, affecting not just your financial performance but also consumer trust in your firm.
Official government research reveals that around 7 in 10 businesses (71%) say that cyber security is a high priority for their senior management. So, being aware of the threats and knowing how to respond is crucial.
With data showing that the average breach costs a firm in excess of £1,000, read on to find out more about the rising threat of a cyberattack, what the risks to your firm are, and some tips for protecting your company.
A third of businesses report a data breach of cyberattack in the last 12 months
According to government data, almost a third (32%) of businesses recall they had experienced breaches or attacks in the previous 12 months. This figure increases for medium businesses (59%) and large businesses (69%).
Among those identifying any breaches or attacks, the government estimates that the single most disruptive breach from the last 12 months cost each business, of any size, an average of approximately £1,100. For medium and large businesses, this was approximately £4,960.
So, why do cyberattacks occur? Most often, it is because criminals want:
- The financial details of your business
- Your customers’ financial details (for example, their bank or credit card data)
- Sensitive personal information
- Your staff or customers’ email addresses or logins
- Customer databases
- Intellectual property (IP).
Cyberattacks against businesses are often deliberate and motivated by financial gain. Other motivations may include espionage – stealing valuable information or IP – or to make a social or political point.
3 risks your business faces from cyberattacks
1. Financial damage
A cyberattack will often result in a substantial financial loss. As you read above, this exceeds £1,000 on average. The cost to your firm comes from:
- Theft of money
- Disruption to trading (for example, if you’re not able to trade online)
- Theft of financial information
- Potential loss of business or contracts.
If you have to deal with a breach, it’s also likely that you will incur costs associated with repairing affected systems, networks and devices.
2. Legal consequences
Strict data protection regulations require you to manage the security of all personal data you hold, both for your staff and customers.
If this data is accidentally or deliberately compromised, and you can’t prove that you deployed appropriate security measures, you may face fines and regulatory sanctions.
3. Reputational damage
Trust is an essential element of the relationship your customers have with you. Cyberattacks can damage the reputation of your business and erode the trust your customers have in you.
This, in turn, could potentially lead to loss of customers and sales and a reduction in turnover or profits.
The effect of reputational damage can even affect the relationships you have with your suppliers or partners, investors and other third parties with a vested interest in your business.
3 ways to ensure your business is protected against a cyberattack
1. Do a cyber risk assessment
Your first step should be to conduct a cyber risk assessment. This involves the identification, analysis and evaluation of cyber risks.
As part of the assessment, you should look at the entire IT infrastructure of your business and try to identify possible threats arising from vulnerabilities within your systems, and from people, processes, and technologies.
The National Cyber Security Centre (NCSC) offers a free online tool called “Exercise in a Box” which can help you understand how resilient your company is to cyberattacks. You can also practise your response in a safe environment.
Alternatively, you can use the NCSC’s free “Check your cyber security” service to perform a range of simple online checks to identify common vulnerabilities in your public-facing IT.
2. Invest in staff education
Research shared by FTAdviser suggests that up to 90% of data breaches are a result of successful “phishing” campaigns. This is where a staff member might inadvertently provide financial information or logins to someone impersonating a trusted source.
Investing in the education of internal staff can help them to spot the warning signs. Firms that promote an open culture and undertake regular employee training and testing are likely to be better positioned to defend themselves from ever-evolving social engineering techniques.
The NCSC provides some basic cybersecurity training on its website.
3. Invest in cyber insurance
Specialist cyber insurance policies can cover business interruption and provide technical and legal support.
These carefully designed policies can also provide coverage for financial losses as well as pay out the funds you need to quickly repair the damage to technical infrastructure that can result from a data breach. It can be a valuable safety net and help your business deal with any such incident.
Get in touch
While we can’t protect your business from a cyberattack, we can help you to create a financial plan that can help you to achieve your long-term goals.
To find out more, please get in touch. Email hello@sovereign-ifa.co.uk or call us on 01454 416653.
