A weak data security exposes your business to cyber-attacks. To protect your valuable data — particularly your customers’ sensitive information — you must increase your entity’s data security efforts. Becoming familiar with these 4 common data security threats can help you prepare practical strategies to block any destructive attacks.
A growing concern
Cybercriminals choose no one — both huge enterprises and small businesses are at risk.
This year alone, the global average cost of a data breach amounted to around $7 million*, a report from IBM revealed.
Financial institutions’ widely used systems are the common targets of attacks. When such crime succeeds, “it could quickly spread through the entire financial system, causing widespread disruption and loss of confidence,” states an article from the International Monetary Fund (IMF).
But the aftermath of a cyber incident is not only limited to financial losses. Aside from your bottom line, an attack can also cause:
- Reputational damage
- Loss of customer trust
- Potential legal lawsuits and fines (if your business is found negligent)
- Compromised business and consumer information
These impacts are too heavy to bear, especially for small businesses.
Data from the Australian Cyber Security Centre (ACSC) shows that in the 2021-2022 fiscal year, the average cost per cybercrime for small businesses rose to over $39,000 — an amount that’s enough to cover a business’s first year of operations.
If this is the case, how can you identify threats to data security, especially when your business still has a limited capacity to have an in-house IT support team?
*The global average cost has been converted into Australian dollars to ensure consistency in presenting the cost of cyber-attacks for AU businesses. The report presents the said data in U.S. dollars, which amounts to $4.5 million. As of this writing (21 September 2023), 1 Australian dollar is equivalent to 0.64 U.S. dollar.
Common data security threats
Increasing your awareness of the common data security threats is the first step to warding off unwanted attacks.
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Online scams
Scammers use deceiving tactics to extort money from your business. Among the activities they do include:
- Tax time scams: Scammers instigate fear and intimidation towards their targets to prevent the latter from thinking clearly. For example, they may tell you that your tax file number (TFN) has been suspended due to money laundering or they may threaten you with immediate arrest. Both methods are not being carried out by the Australian Taxation Office (ATO).
- Invoice email scams: Scammers pretend to be legitimate suppliers advising you about changes to payment details. That’s why before you make any payment, make sure to do your due diligence first.
For a more extensive guide to verifying and reporting a scam, check out this resource from the ATO.
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Ransomware
Ransomware is a type of malware that locks or encrypts your files to prevent you from accessing them. Visiting suspicious websites, opening email attachments from unknown sources and clicking malicious links online are the usual causes of ransomware.
Because ransomware prevents you from accessing your files, it’s crucial to back up your data to minimize its impact on your operations.
You must also refrain from paying a ransom since it does not guarantee that you can regain your access to data and that it will not be leaked online. In addition, when you pay a ransom, you may only turn your business into an easy target.
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Spear phishing and whaling
Spear phishing and whaling are targeted email scams wherein the attacker pretends to be someone from your company to get sensitive information about your business.
- Spear phishing attack: Targets employees and asks them to give confidential company information.
- Whaling attack: Targets the management or executives in a company.
To guarantee a successful operation, the attacker gathers information about the target through social media, search engines or the company’s website. This way, they can create a more customised strategy against the target.
For example, they may ask you to pay an invoice, open an attachment or enter login details into a fake website. When you do any of these, the attacker can steal confidential business information or get a foothold in your network.
Some ways to reduce your risk include:
- Checking the email address of the sender.
- Confirming with the sender if they’ve made the questionable/unexpected request. As much as possible, you must use a different communication channel for confirmation.
- Refraining yourself from clicking on links from suspicious senders.
- Conducting company-wide cyber awareness training.
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Insider threat
Like it or not, people are still the biggest security risk of a business. This risk often comes in the form of an insider threat. It occurs when any of your current or resigned employees use their knowledge to target the weaknesses of your business. For example, they may want to commit fraud or sabotage your business.
To manage this risk, you must have proper information management systems in place like:
- Matching your employees’ access to what they only need to complete their jobs
- Removing access of resigned employees
- Backing up your files regularly
- Implementing a strict file-sharing policy
Recovering your compromised business data is far more expensive than investing in robust data security measures. Before any attack happens, make sure that you’re well aware of the threats and the countermeasures you can take.
Process your financial data securely
If you need assistance in processing your financial data in a secure environment, our accountants at ABJ Solutions can help. We only use top-of-the-line software like Xero and Spotlight Reporting to keep our clients’ financial data safe.
