Cyber risk – how SMEs can protect themselves and their customers

Cyber crime

SMEs are at risk of the same scams and cyber attacks that affect individuals, and should take steps to protect themselves.

The cost of a security breach can run into the millions of dollars, on top of the reputational damage a high-profile breach can cause.*

While large enterprises can often recover from a security breach, the smaller operating margins of SMEs mean that a significant breach can have severe ramifications, even hampering the business’s ability to continue operating.

Recent threats include online-banking scams where customers receive a text message asking them to login to their banking site to confirm details. The message includes a URL, which takes the customer to a fake page, set up to access their account details. The attackers can then use those details to gain full access to the business accounts, potentially wiping them out.

These scams are successful because they look plausible, and busy business owners may not have time to carefully consider and examine the links they’re clicking on, particularly if they’re on a mobile device screen rather than a larger, easier-to-read screen.

One way SME owners can protect themselves from these scams is to use business-banking services rather than consumer services. They tend to offer more sophisticated security options and additional security for multiple-account users.

Fraud is another key risk area for SMEs. Employees with access to the business’s bank accounts, for example, could potentially withdraw money without getting caught. It is essential for business owners to be actively involved in business banking and to check the accounts regularly for any anomalies.

Some cyber breaches are likely to happen regardless of how vigilant the business owner is. These include hackers gaining access to systems to steal commercially-sensitive information, customer payment details, or actual money, and ransomware. The costs of these losses can be enormous and, if the intrusion isn’t detected straight away, the losses can mount up over time.

SMEs are subject to the same privacy legislation as larger companies – they must, by law, keep customers’ private information secure or face potentially-large fines as well as damage to their reputation.

Customers are increasingly demanding that the companies they do business with are secure. To compete effectively and to avoid the losses that come with security breaches, SMEs must review their anti cyber risk measures regularly and update them as required.

We have identified eight ways SMEs can protect themselves:

  • Keep software updated, since updates often include security patches.
  • Educate all staff about cyber risks and how to protect themselves and the business.
  • Demand strong passwords for all applications, not just key applications like banking or invoicing.
  • Use up-to-date security solutions including anti-virus, firewalls, intrusion detection, and threat detection.
  • Never click on links to banking sites in emails or texts. If in doubt, call the bank directly.
  • Treat mobile devices the same way you would treat computers; they are equally, if not more, vulnerable to attack.
  • Ensure your files are backed up regularly and reliably.
  • Get professional, external advice to improve your security and conduct a risk assessment.

Michael Shatter, Risk Advisory partner, RSM Australia

* Cost of Data Breach Study: Global Analysis, Ponemon Institute (sponsored by IBM). May 2015