With the growth of digitalisation, the number of cyber attacks occurring in industries across the board has rocketed in the last few years. Reliance on digital data and workforce mobility has contributed significantly to this increase in cybercrime. Steve Thomas, Finance and Project Based Accounting Expert at The Access Group, takes a look at cyber security within the information technology sector, and the potential costs businesses could face.
The most common type of cyber attack is a phishing attack, which is often seen in the form of a fraudulent email. However, attacks that inflict the most damage in terms of a loss of monies or data are less common types of security breaches. These include viruses, ransomware and hacking attempts.
It is estimated that more than 50per cent of all malware attacks target small businesses. With that being said, research shows that bigger businesses are more likely to identify a security breach. Security breaches in SMEs can be deadly in financial terms due to the implicated cost which continues to increase, during the period in which the breach remains undetected. IBM security found that the average time to detect a data breach was 197 days. An undetected breach in an SME for this period of time could lead to repercussions which are fatal to the existence of the business.
Security breaches are particularly deadly to companies in the information technology sector. Businesses including IT consultancy firms and IT services and software are often desirable targets of cybercriminals. This is because these types of companies digitally store very valuable information such as personal and banking details – a jackpot to hackers.
Additionally, companies in this sector tend to be early adopters of new technology which may still be evolving, therefore they are more vulnerable to attacks of this kind. One of the biggest threats for the high-tech sector is loss of intellectual property (IP) which can lead to detrimental consequences for SMEs within the IT industry.
Not only are attacks of this kind happening more frequently, but hackers are also becoming more sophisticated, resulting in businesses experiencing more damaging attacks. IT companies are concerned with establishing trust with clients; therefore an attack of this sort can result in serious privacy breaches of confidential client information.
SMEs have also reported other negative consequences following a data breach, including suffering from a lack of trustworthiness and a decline in reputability. Not only does this negatively impact client satisfaction, but it also has the potential to lead to a lower ranking against competitors. Aspects such as these will influence future business growth, as well as increasing the risk of damaging profit and customer confidence.
In a recent report published by the UK Government’s Cyber Streetwise campaign and KPMG, it was revealed that 89per cent of victims felt that attacks negatively impacted their reputation, whilst 26per cent reported that they were unable to grow in line with previous forecasts following a cyber attack.
It is vital for SMEs within the IT industry to prioritise cybersecurity management in order to gain an edge over competitors, whilst maintaining a smooth relationship with clients based on trust. By adopting a cloud based finance solution, SMEs in industries across the board are given a better position to thrive, without having to worry about poor cybersecurity. Cloud accounting offers an integrated IT accounting software which provides a secure and efficient management system.
Currently, the annual average cost for businesses to recover following a data breach is £22,700. Whilst this amount would not noticeably impact a multinational business, for SMEs within the IT sector, this could be the difference between being able to continue operating and going into administration. It is absolutely necessary to employ a robust security system in order to prevent future data breaches and to provide client satisfaction, safety and confidence.
By implementing the correct security measurements and preventing cyber attacks, SMEs could save thousands of pounds which could be invested back into the business. £22,700 could fund various assets such as 65 new Dell business desktop computers, 39 new Epson scanner/printers, or even cybersecurity protection insurance for 19 years. One thing is for sure, the costs of cyber security breaches can be substantial.
What would you spend £22,700 on?
