Small Businesses Vulnerable to Data Breaches and Cybercrime
Small businesses have technology to thank for a lot of things. The rise of ecommerce, for one, has transformed the way consumers buy, while “bring your own device” policies have enabled better collaboration and efficiency at smaller firms.
However, small business owners also have technology to blame for the onset of cybercrime activity. More than ever, tech-savvy ne’er-do-wells are targeting firms in an effort to steal company and consumer data. To prevent against this, many entrepreneurs have turned to a small business equipment lease in order to boost their digital protection capabilities. Yet, many small businesses leave themselves exposed to data breach incidents, and a recent survey indicated a number of them didn’t notify those potentially harmed by the breach.
Half had a breach, just a third reported
Overall, 55 percent of respondents admitted to experiencing a data breach at least once, 53 percent said they had multiple instances of data being hacked into, usually electronic records, according to Ponemon Institute and The Hartford Steam Boiler Inspection and Insurance Company (HSB). Despite 46 states in the country requiring that firms alert individuals to data breaches involving their personal information, just 33 percent did so.
“Smaller companies are targeted by data thieves, but they often don’t know how to respond when sensitive information they keep on customers and employees is lost or stolen,” said Eric Cernak, vice president for HSB. “Failing to act in a timely and effective way can harm the reputation of businesses and even risk legal penalties in many states.”
HSB said the most common causes behind data hacks were mistakes made by employees or contractors, compromised laptops and smartphones that were stolen or lost, and procedural errors.
Small businesses said money is part of the problem in preventing data breaches. Only 62 percent of respondents have contracts with third-party entities – which have access to company and consumer data – that would have the latter cover all associated costs of a breach. Seventy percent said they would purchase insurance if it helped cover expenses. Overall, 70 percent said losing data that would identify clients and others would be more damaging than losing confidential company data.
Small business owners are certainly aware of the risks and consequences of data breaches, yet many are unprepared for such occurrences. In order to safeguard their information and customer relationships, businesses can look to National Funding for a working capital loan to set up anti-data breach infrastructures and protocols.