Businesses and retail ecommerce entities mostly rely on technology and connectivity. The current connected era never lets you switch off your mobile phone or cut the link with your distant customers. Why? Everyone is fond of digitalization, and almost everything is carried online. Don't you think it is enough convenience? Yes, it is, but what about the vulnerability to cyber-attacks? Your website or application would be prone to cyber threats, forcing you to take robust security measures and update your firewalls.
Being a business entity, you can't withstand the negative effects of cyber-attacks as they are too harsh to overcome. This post will uncover the possible consequences of cyber-attacks on your business. Keep scrolling to learn more!
Understanding the Consequences of Cyber Attacks on Businesses
Businesses – especially small to medium-sized – are always exposed to cyber threats, and a few can handle the chaos. According to Accenture's Cost of Cybercrime Study, 43% of cyber-attacks are aimed at small businesses, but only 14% are prepared to defend themselves. Cyber-attacks can cause serious damage to a company, its business profile, and its revenue. Here is a comprehensive list of downsides you can experience after a cyber attempt.
1. Loss of productivity:
A cyber-attack can affect your business operations, and you may experience a "shutdown scenario." Being the deadliest of outages, your entire organization will halt after a cyber-attack, causing severe damage to the productivity graph. The incident will consume your staff members' time while your IT team crafts a solution. Not a single crew member can contribute to the company's growth while your IT team fights the fire.
Removing the malware from the system will take a good time. Even after the problem is solved and normal operations resume, you need your IT teams to stand on your side for the following tasks:
Determine the root cause
Reinforce security measures
2. Financial losses:
The financial impact of cyber-attacks can never be neglected – especially if you run an online business. When adjusted for organizational size, cyber-attacks can hurt small businesses more than large-scale companies. According to Hiscox Cyber Readiness Report, about 6% of companies have to pay a ransom to regain critical IT system control. Businesses can face financial losses on various fronts, including the following:
Paying a ransom
Shutting down business operations
Losing sensitive data
Paying security experts to solve the problem
According to a report from Kaspersky Labs, small and medium-sized businesses spend an average cost of $117,000 after data breaches. Regulatory penalties are also too harsh for these businesses to control, leading to severe financial losses.
3. Loss of business reputation:
Another serious downside of cyber-attacks is losing your potential customers due to losing a business reputation. What if you lose your customers' sensitive information – bank account data and social security numbers – after a data breach? No one will believe your brand anymore, tagging you with a negative label in the industry.
Even if your business recovers from a cyber-attack, it will never regain customer trust. Customers who have had their sensitive information leaked in a cyber-attack will consequently lose interest in your business, causing you to suffer the long-term financial impact of cyber-attacks.
4. Business disruption:
Cyber-attacks can disrupt your business, which is probably this event's most obvious downside. Your online traffic will find your website down, whether it is a major security breach or a minor compromise. You lose money every minute you work to recover from the effects of cyber-attacks on your business.
Since a cyber-attack can cause productivity loss, business disruption will also be your fate. Small businesses are often the victims of these attacks. 40% of small businesses that reported a cyber security issue experienced business disruption.
5. Increased costs:
Cyber-attacks can cause spillover effects, as customers and society will bear the added costs. Businesses will increase their costs after a cyber-attack, and we will see the effects of cyber-attacks on society. Another major financial burden is ransomware, which prevents the company from accessing its IT system unless the hacker is paid. According to Hiscox Readiness Report, 6% of companies paid a ransom in 2019, creating $381 million in losses.
Moreover, businesses will hire lawyers and specialized IT personnel to comply with cybersecurity regulations. These endeavors will result in unwanted price hikes, adversely affecting the customers and society.
6. Operational disruption:
Operational disruptions can cause serious damage to the business profile of a company. Besides financial damages, companies often experience indirect costs from cyber-attacks, including revenue lost from major interruptions. Bad actors will use every strategy to handcuff your normal activities, causing operational disruptions at different levels.
One of the leading symptoms of cyber-attacks is an infected computer with malware to erase high-volume information. Hackers can also install malicious codes on your system to block access to your website, causing operational disruptions.
7. Altered business practices:
Cyber-attacks can hurt your business more than you can anticipate. It is not just about financial losses; altered business practices can also be a hard-to-make decision. Companies must rethink their data collection protection practice as the previous ones are now exposed to bad actors. Did you know that most businesses have stopped saving customers' personal and financial information on their sites?
What if a business cannot manage and secure an online extension? It will ultimately have to shut it down to protect its brand identity and corporate image. Keeping in mind the negative effects of cyber-attacks, companies will change their way of business and customer interaction.
8. Stolen intellectual property:
A company can carry numerous valuable assets, including product designs, technologies, and go-to-market strategies. Intellectual and intangible assets account for a major part of a company's assets, and taking care of them is mandatory. According to Intellectual Property Advisory Ocean Tomo, intangible assets accounted for 87% of the value of S&P 500 companies in 2015.
Most of this intellectual property is often stored on the cloud, which is vulnerable to cyber-attacks. What if the property is stolen in a cyber-attack? Various companies reported having lost their intellectual properties in cyber-attacks, and you can be the next target.
What is the need of the day?
One can never understate the essentiality of cybersecurity in the current digital world. A single cyber breach can lead to immense consequences, and the effect would be spillover due to the interconnectivity factor. Companies can experience financial, economic, and corporate image damages, resulting in customer loss. Therefore, cybersecurity is essential to protect businesses from these devastating consequences. A perfect website maintenance plan is all it takes to secure your website and business.
The need of the day is to take care of your websites and web applications. Building a vibrant website and leaving it while expecting positive returns is never enough. No! It would be best to opt for website maintenance services and allow experts to update and maintain your website to keep bad actors away!
Let SpiralClick Protect You against Cyber Attacks!
Raising your security firewalls and updating patches can protect your website, but are these practices enough? Certainly not! Continuous website maintenance is necessary to keep the bad actors away from your site, and SpiralClick can help you! Contact our experts and allow them to protect your business website against cyber-attacks.
1. What are the possible consequences of cyber attacks?
The negative effects of cyber-attacks are too harsh to handle these days. Some of these downsides include stolen sensitive data, destroyed networks, financial losses, and damaged business reputation.
2. What are the economic effects of cyber-attacks?
Cyber-attacks can produce spillover effects, extending to society and the economy. Some economic losses caused due to continuous cyber-attacks include financial and economic hardships, loss of critical intellectual property, loss of revenue, and diminished international trade.
3. What is the impact of cyber security on society?
Cyber security is crucial for our society as it fosters safety and safeguards all data types from theft and loss. Some types include sensitive data, protected health information (PHI), personally identifiable information (PII), and intellectual property.
4. Why prevent cyber-attacks?
Protection against cyber-attacks is crucial as these bad actors can cause havoc. They can share sensitive information, use passwords to access funds, and even change the data to their benefit. Organizations must have security solutions to protect against these attacks.
5. What are the causes of leading cyber-attacks?
Cybercrime has increased in the online community due to various reasons. A few reasons are increased data transfer, increased remote working, and keeping sensitive data on personal devices.