Why business leaders should prioritize cybersecurity

Why business leaders should prioritize cybersecurity

The growing sophistication of technology has been a huge boon for business in recent years, helping companies reach unprecedented levels of productivity, profitability, and visibility. Yet, along with these benefits comes the growing threat of cyberattacks.

Cybercriminals have consistently improved their tools, quickly adopted new methods, and adapted for emerging cybersecurity advancements. No wonder the odds of experiencing a data breach within two years are increasing. According to the IBM Security and Ponemon Institute 2019 research, the probability for 2019 is 29.6%, which is a 27.9% increase from 2018. Now, experiencing cyberattacks does not seem like a matter of if but when.

Owners of small- and medium-sized businesses (SMBs) may believe hackers wouldn't waste their time on businesses their size, but they’re in for a rude awakening. Cybercriminals can now launch automated attacks upon thousands of companies at once and leach away valuable data from firms that fall prey to their tactics. SMBs make easy victims because they often lack the robust security that keep hackers at bay. This makes SMBs vulnerable to the following consequences:

#1. Financial cost

According to the Ponemon Institute, the global average cost of a data breach in 2019 is $3.92 million, which is a 1.5% increase from 2018. In fact, the average climbed from $3.5 million in 2014, showing a 12% growth between 2014 and 2019. US-based firms have it even worse with an average cost of $8.19 million per cyberattack. And smaller organizations have disproportionately larger costs (average cost of $2.65 million or $3,533 per employee) relative to their size than larger organizations (average cost of $5.11 million or $204 per employee), which can hamper their ability to recover financially from the incident.

Secondly, the data breach life cycle — the time it takes for organizations to identify and contain a breach — in 2019 is 279 days, which is 4.9% longer than the 266-day average in 2018. This is bad news since the longer a breach’s life cycle is, the greater the cost.

Last but not least, data breach costs impact organizations for years. While an average of 67% of breach costs come in the first year, 22% accrue in the second year after a breach, and 11% occur more than two years after a breach. The financial impact of a data breach lingers for years in the form of lawsuits, regulatory action, and lost customers.

#2. Risk to clients and other stakeholders

On a global scale, the average data breach exposes 25,575 sensitive consumer records. “Mega-breaches” like Facebook’s Cambridge Analytics scandal even lost one million or more records. For example, in 2019, facial recognition records, fingerprints, log data, and personal information were found on a publicly accessible database as a result of a reported major breach of Suprema’s biometric database.

But customers are not the only ones in peril. SMBs can also be used as “entry points” to bigger, more profitable organizations that do business with them. A prime example is the infamous 2013 Target hack in which 40 million credit cards were stolen when attackers used third-party HVAC vendor to get into Target’s network. In fact, a 2019 Spiceworks survey showed that nearly half of firms suffer data breaches through their third-party vendors.

#3. Damage to your reputation

Cyberattacks are a major public relations problem — research has shown that up to a third of customers in retail, finance, and healthcare will stop doing business with organizations that have been breached. These affected organizations also often see an increased customer acquisition cost.

Not only do these consequences translate directly to loss of business, but these can also devalue the brand you’ve worked so hard to build. A reputational hit may also affect your ability to attract the best talent, suppliers, and investors.

Cybersecurity is more important than ever

These alarming statistics only stress the pressing need for businesses to invest in cybersecurity to protect their data and systems from any unauthorized or criminal use. Doing so helps combat cyberattacks and keeps customers and other stakeholders safe and engaged.

With the growing sophistication of cyberattacks, companies need to use a strategic approach to IT security — one that may require the help of IT experts. When you partner with Leverage IT, we will help you develop and implement a holistic cybersecurity strategy that will not only manage risk, but also allow you to innovate, transform, and differentiate your business — all while protecting your most critical assets. Don’t delay any further — let’s start building your IT defenses.