The Risks of Neglecting Your Company’s Online Data Security

What Happens When Businesses Ignore Data Security

Data security breaches cause a web of IT problems for SMEs. This is often just the tip of the iceberg, though, with far larger consequences presenting serious risk.

Financial Losses

When a business falls victim to a data breach, the first course of action will be to shut down operations. Unfortunately, that is rarely a simple or affordable option. The price of forensic software will also add up, and some business owners might even resort to huge ransomware payouts.

Legal and Compliance Penalties

It’s only a matter of time until legal officials come knocking at business HQs in reaction to a data breach. In the U.S., federal and state-specific data protection regulations are enforced, including the HIPAA and the CCPA. Failing to comply with such laws could result in serious fines. It’s also likely that legal action will be taken, further draining the business’s time and resources.

Damage to Reputation and Customer Trust

Even if a small business manages to minimize the financial losses and PR nightmare of a data breach, there could still be lasting damage. Word can quickly spread, potentially leading to the downfall of an otherwise rapidly growing business.

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The Most Common Cybersecurity Weak Spots That Criminals Target

The sooner a business becomes aware of data security flaws, the better prepared it will be for protecting itself. For reference, the following data “cracks” represent the ammunition that cybercriminals are seeking to exploit:

• Weak passwords, particularly if they are being reused
• Employees who aren’t trained to identify phishing attempts
• Outdated software that isn’t patched with the latest security updates
• Poorly configured cloud data storage

How Criminals Use Stolen Business Data

Despite rising awareness, few business leaders are aware of why criminals want their data in the first place. So, the first port of protection is simply to be aware of the risks.

Identity Theft and Credential Stuffing

One of the most famous criminal approaches to illegal data access is to use it as part of identity theft and fraud. A single password leak is all that is needed for a malicious strategy called “credential stuffing”. Criminals will test these login details on countless other websites, potentially gaining access to otherwise locked-down accounts.

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Selling Data on Illegal Online Marketplaces

The following strategy is particularly concerning. After gaining illegal access to the data of a business, criminals will quickly attempt to turn a profit. They’ll sell the data on illegal dark web marketplaces, wiping their hands clean of the evidence. Highly effective preventative measures are available, but such tools are often only used in reaction to an existing breach. At that point, it’s usually already too late.

Taking Preventive Action

While the risk of a data security breach is concerning, there is no shortage of preventative strategies to protect your SME. For example, businesses can leverage dark web monitoring software. This technology ensures that, if a breach does occur, any data being sold illegally would automatically be detected.

In addition, the following methods make all the difference:

• Routinely updating data management and cybersecurity software
• Encrypting sensitive data
• Providing data protection and cybersecurity training to employees
• Using auto-generated password management tools

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Focusing on Early Detection, Not Reaction

Even if just one of the data security risks discussed in this article is present, it could still be crippling for a small business. The most important thing to remember is that early detection is the key to avoiding a serious breach. This fact is becoming even more apparent as data breaches become increasingly sophisticated and difficult to detect. 

Cybercriminals work fast, and reactive action rarely outpaces them. Ultimately, preventive action will always be cheaper and more effective in the long run.