In today’s digital world, businesses are rapidly adopting cutting-edge technologies to perform core business functions and interact with an expansive consumer base within the digital marketplace. The use of online marketplaces, mobile applications, and cloud computing has set the pace for digital transformation and e-commerce. Thousands of businesses have chosen e-commerce as their mode of operation worldwide. However, the increased use of technology has also created new opportunities for cybercriminals and hackers to use sophisticated and complex tools and technologies to steal corporate information, causing businesses to lose millions of dollars. As a result, cybercrime is now the fastest-growing and most popular type of criminal activity.
With new and more powerful ways of stealing information and disrupting services, cybercriminals are the biggest threat to online businesses. This article elucidates the impact of cybercrime and weak cybersecurity protocols on businesses and how they can mitigate risks.
What is Cybersecurity?
Cybersecurity refers to a set of tools, technologies, and mechanisms that are used for countering a variety of security threats to networks, applications, and data from inside or outside threats. Cybersecurity measures focus on mitigating risks of data and network breaches, unauthorized connections and data access, data leaks, and other criminal activities that can disrupt business operations or cause financial loss.
Organizations prioritizing data and network security hire professionals with industry experience in encrypting information, securing networks and applications, and detecting and blocking active cyberattacks. Cybersecurity specialists have an educational background in cyber security management and have an in-depth knowledge of risk management, intrusion detection and prevention, incidence response, and data encryption techniques. A team of cybersecurity experts, network engineers, and managers is responsible for creating a security layout for the technology infrastructure and implementing security policies to ensure the data and network are safe from inside and outside threats.
Cybersecurity Risks to Businesses
Cybercriminals are experts in corrupting, stealing, restricting access to information, and discontinuing businesses’ online services using various sophisticated tools and mechanisms. They can gain access to information through the following means:
- Using application and network vulnerabilities to gain access.
- Sending emails and SMS to employees and pretending to be an authority figure to ask for credentials and bank information.
- Using emails and SMS to trick employees into clicking malicious links.
- Using specialized tools to overwhelm web servers and render a business website offline.
- Attacking third-party systems or clouds.
- Using cross-site scripting and other techniques to gain access to the website database.
- Deciphering encrypted information and steal or tamper valuable information during data transmission.
- Using hit-and-trial methods to discover login credentials.
- Disgruntled employees leak sensitive information to competitors or outsiders.
Impact of Cybersecurity Breaches on Business
With more and more businesses going online, the cybercrime rate is increasing at an alarming rate. The latest statistics reveal that cybercrimes have increased by 28% in the third quarter of 2022. By 2025, cybercrimes are expected to cost businesses $10.5 trillion worldwide. Here’s how a cybersecurity breach can impact businesses:
The digital marketplace is saturated with businesses of the same niche. A good cyber posture is important for a business to improve its credibility among customers and stakeholders. When a business is vulnerable to or suffers from cyberattacks, it loses its credibility, customer trust, and loyalty. Customers and suppliers prefer engaging with businesses that can be trusted with sensitive financial information and personally identifiable information (PII). A bad cyber posture results in tremendous damage to a business’s reputation. While it takes years for businesses to regain significant reputation, such damage has the potential to completely wipe businesses off from the digital marketplace.
A lack of trust from stakeholders and investors influences a business’s debt ranking and funding. As businesses lose their reputation between customers and suppliers, the lack of trust and unreliability results in a significant reduction in sales, reflected on annual revenues. Businesses also lose a massive amount to hackers particularly when they face a ransomware attack. Employees falling victim to phishing and smishing often give out banking information. Businesses only become aware when hackers transfer funds from accounts or make huge financial transactions.
Loss of Valuable Information
Customer and supplier information and corporate data are some of a business’s most critical digital assets, and this is exactly what cybercriminals are looking for. Lack of adequate security protocols results in sensitive data theft, including financial records, customer and supplier credit card information and PII, and sensitive corporate data like strategies, product designs, intellectual property, technology, and website database. Every 1 in 5 businesses has reported stolen intellectual property by Chinese hackers during the past few years.
Disruption in Services
Active attacks like denial of service (DoS) and distributed denial of service (DDoS) attacks are some of the most damaging cybercrime in the digital economy. Attackers use specialized devices from a variety of locations to overwhelm the web server with millions of connection requests per second. The web server fails to respond to this massive amount of requests, and eventually, the website goes offline. Denial of service attacks has increased over the years. Customers, employees, and stakeholders are unable to access the website. DoS and DDoS attacks disrupt business services over the internet for a long period, causing millions of dollars in loss. Apart from these attacks, cybercriminals use a variety of tools in the form of malware, ransomware, adware, phishing, smishing, and security lapse in applications to restrain a business’s day-to-day activities.
Penalties from Regulatory Authorities
E-commerce businesses and those who deal with customer and supplier credit card information must comply with PCI-DSS standards to ensure the security of sensitive card information. When a business faces a cybercrime resulting in data exposure, it has to face massive penalties from the regulatory authorities due to non-compliance with data security standards. Apart from the financial penalty, the concerned bank also halts its services for the business, customers lose trust, and regulatory authorities may suspend business activities for a long duration.
Effective Counter Mechanisms against Cybersecurity Attacks
Cybersecurity has become a major concern for businesses and organizations across the globe. Businesses are investing heavily in adopting state-of-the-art technology to secure their applications, data, and network from data breaches and active or passive attacks. Cybersecurity professionals use a variety of tools and techniques to counter cybersecurity threats. Here are a few simple security mechanisms that businesses can implement to mitigate cybersecurity risks:
- Create a comprehensive security policy, taking cybersecurity specialists, managers, network engineers, system architects, and technical staff on board.
- Implement security policies in their true spirit.
- Implement network and application firewalls to prevent unauthorized access.
- Use data encryption techniques to secure data during transmission.
- Run various tests like network penetration testing, application penetration testing, ethical hacking, white-box, black-box, and grey-box testing, vulnerability scanning, and others to identify points of compromised security and use counter techniques to minimize security vulnerabilities in applications.
- Install up-to-date web security systems on devices and workstations.
- Implement continuous monitoring systems to monitor network traffic and user activity over the internet.
- Educate employees on various hacking attempts and how to counter them effectively.
- Change login credentials for web servers, network servers, and application accounts with administrative rights.
- Secure the internet of things (IoT) from outside threats.
- Restrict access rights for employees and allow only as much access to information as they need.
In today’s world, cybercriminals and hackers constantly threaten businesses, organizations, and individuals. Newer and more complex hacking techniques require businesses to implement cutting-edge technology to protect critical business and customer information and mitigate cyberattack risks. We hope the preceding list has helped you understand the impact of poor cyber posture on businesses and the significance of implementing security protocols for your company’s survival and growth.