Small and midsize businesses lose, on average, about $500,000 per cyberattack. This cost includes lost revenue, customers, market opportunities, and clean-up expenses.
Minimizing your cyber risk exposure is key to securing your small business. But it can be challenging for a couple of reasons:
The risk landscape changes frequently because of the adoption of new technologies such as the Internet of Things (IoT) and artificial intelligence (AI).
New defense technologies, such as security analytics, are complex and costly to adopt.
Small businesses that are not aware of the latest cyber risk management trends will be not be able to defend themselves against future attacks. You should invest in the right security technologies such as data protection and security automation to secure your business for the future.
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3 cyber risk management trends and steps to take
Risk management is the first and most important step toward improving cybersecurity. It helps minimize security risks and prevents cyberattacks. Let’s look at what you’re protecting yourself from and how you might do it.
Cyber risk relates to cases of financial or reputational damage to an organization that arises from a failure or from sabotage of the company’s information technology systems. Risk quantifies the probability of a cyberattack occurring.
For example, data theft is a risk that most small businesses face. The risk materializes into a cyberattack or data breach when threat elements such as hackers exploit vulnerabilities such as unsecured data.
Cyber risks today include not just system downtime or identity fraud, but also a variety of other events such as loss of intellectual property, theft of customer data, damage to business reputation, and loss of business partner and/or client trust.
Cyber risk management is intended to minimize the probability of occurrences of internet-related threat events, such as viruses, malware, or DDoS attacks that lead to financial or reputation damage.
Cyber risk management strategies include various components. Some main ones are:
Investing in active and passive security technologies such as user-behavior analytics and anti-malware to identify and respond to threats.
Improving vigilance and security knowledge of employees through security awareness training programs.
Creating policies and engaging security champions to guide employees through handling and responding to risks.
Your security risk management strategy should be in line with the latest cyber risk management trends. Below we discuss three cyber risk management trends and steps small business should take for effective risk mitigation and management.
Emerging technologies like artificial intelligence (AI), machine learning (ML), and security analytics help businesses strengthen their active defense mechanisms.
Active defense mechanisms identify threats and mitigate risks before they become an attack, helping SMBs save an average of $117,000 per avoided attack.
AI, ML, and security automation tools analyze tons of network data to identify patterns, compare it with their updated malware databases, and classify files as malicious or safe.
For example, Daqri, a Los Angeles-based augmented reality company uses AI tools to monitor traffic from over 1,200 IT devices. It uses this data to automatically identify malicious traffic and to reduce the workload on their lone IT security professional.
Machine learning algorithms also help to predict threats based on previous network traffic patterns, and can even take automatic actions to remove the threats. Some cybersecurity areas that AI can help with include website classification, malware detection, and blocking malicious IPs.
With hackers increasingly using technologies such as AI to target and penetrate systems, businesses must not wait to use these advanced technologies to defend and safeguard their networks.
Build a cybersecurity roadmap. Defining what you want to achieve in the short and long term will help you plan your cybersecurity investments. Your goals could include switching to active defense strategies over passives ones, improving data recovery speed, etc.
Plan technology investments for each of your security goals and engage with expert security consultants if you would like to get extensive guidance.
Invest in security analytics and automation solutions. According to a survey, two out of three IT security professionals are implementing security analytics programs in their organizations. Network and log data analysis help in actively identifying and predicting cyber threats.
Investing in security automation tools will help small businesses save on costs in maintaining IT security teams.
Data risk management strategies will continue to be a priority for small and large businesses: Forty-seven percent of small businesses are budgeting for data security technologies in 2019, ranking it among the top three technologies for small and midsize businesses.
One driving factor for this could be implementation of stricter data privacy regulations such as the GDPR that mandate adequate security controls for storing customer data. But even more pressing is the fact that the volume of data generated each day is also growing enormously.
We create over 2.5 quintillion bytes per day. Connected devices and increased use of internet, social media networks, emails, and other applications is expected to further drive the volume of data creation. This vast amount of data-which includes tons of confidential business data-needs to be stored and controlled properly. Otherwise, you leave yourself vulnerable to:
Loss of intellectual property
Customer data privacy issues
Small businesses are increasingly investing in data security tools to prevent any breaches and comply with government regulations such as GDPR. The growth of data protection technology markets is also testimony to the increased attention and investment in data security tools.
For example, according to Markets and Markets, the encryption software market is expected to grow from $3.9 billion in 2017 to $13 billion in 2022. Similarly, the data backup and recovery software market is predicted to reach $11.6 billion in 2022, a growth of 10.2 percent CAGR (compound annual growth rate) between 2017-2022.
Data is going to remain the primary and most important asset that businesses would want to safeguard over the next several years.
For customers: Show your website cookie policies upfront. Provide options that allow customers to opt-in or out of sharing data with marketers. Let your customers know how you use and store their data.
For employees: Inform employees on how they must use, store, and share company data. Also, let them know of the consequences of any data privacy violation.
Use data protection technology. Invest in data protection technologies such as encryption, data backup, cloud security, and data recovery to improve your security prowess. Authentication and privileged access management tools ensure that only the right people have access to your data assets.
Invest in cyber insurance. Small businesses, on an average, lose $879,582 per year due to data theft or damage of IT assets. Investing in cyber insurance can cover your IT asset damage costs to some extent. Discuss with legal and finance experts to identify the right cyber insurance policy for your business.
Managing employee actions to minimize risky behavior continues to be a challenge for small businesses as well as enterprise organizations.
Phishing, vishing, and quid pro quo are some of the more common forms of social engineering fraud that can entice employees to reveal confidential information. A single phishing attack can cost a midsize business an average of $1.6 million.
According to the Gartner report, “Effective Security Awareness Starts With Defined Objectives” (full content available to Gartner clients), through 2020, businesses that invest in monthly interactive security awareness training activities will experience fewer security breaches that are caused by human error.
More small businesses are planning to add security awareness training in the next few years. According to a survey, 60 percent of organizations already have a formal training program for their security staff and 35 percent plan to add security training programs in 2019.
Make every employee a part of your security strategy: Employees will be more alert and cautious if they feel they are also involved and responsible for the company’s security.
Some of the steps you can take to involve your employees in securing business data and IT assets include:
Security awareness training: Run security awareness training campaigns to educate employees on detecting phishing attempts, malicious files, and data breaches. Measure success of the programs using metrics like click rate to check if employees are opening malicious emails or files.
Gamified exercises and competitions: Select security champions from among employees who display best security practices like reporting phishing emails or data breaches. Conduct hacking contests, application design contests, and brainstorming sessions to enable employees suggest security improvement measures.
As a first step, you must assess your security posture to see how well your cyber defenses are. This will also help you identify whether you are staying updated on the current risk management trends.
In the next few months, we’ll cover each of the above trends in detail. We will cover best practices you must adopt to stay ahead of the curve, how to ensure data privacy, whether to outsource security or not, and many other topics. Stay tuned and continue reading our blog for some great IT market insights.
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