Tech Matters: Small businesses may underestimate threat of cyberattack
Today’s small business owners are grappling with an overwhelming menu of challenges, including supply chain issues, rising inflation along with the fear of recession, labor shortages and the ongoing impact of COVID. So it may not surprise you that cyberattacks rank at the bottom of their concerns. But here’s the thing, while business owners can’t do much in the short term about the cargo ships massed off the shore of China waiting to be loaded with goods, they can take action to prevent a cyberattack that could shut down their operation.
CNBC recently surveyed 2,000 small business owners, part of a quarterly survey program to take the pulse of this sector. In the latest survey — the first to be administered since the Russian invasion — just 5% of small business owners reported cybersecurity to be the biggest risk to their business right now. Quarter over quarter, the number saying cybersecurity is their top risk has held steady and is the lowest priority out of the five surveyed, despite government warnings of an elevated risk of attack from Russian hackers.
Respondents who said inflation is the biggest risk to their business increased from 31% to 38%, solidifying the top spot as the biggest concern. Supply chain disruptions and COVID-19 as the biggest risk both declined slightly.
While cybersecurity has ranked as not much more than an afterthought, 4 in 10 small business owners said they are very or somewhat concerned their businesses will be the victim of a cyberattack within the next 12 months. The level of concern is tied to the size of the business. Only 33% of owners with fewer than five employees are concerned about a near-term cyberattack, while 61% of those with 50 or more employees expressed their worry. And this makes sense because the most common entry point for hackers is a phishing scheme, luring an employee to open a malicious attachment or clicking on a malware-loaded link. The more employees, the higher the risk.
The survey also uncovered a serious disconnect between how confident business owners are about responding to a cyberattack and the safeguards they have put into place to protect their systems. About 6 in 10 small business owners said they were very or somewhat confident that they could quickly resolve a cyberattack on their business if needed.
In contrast, fewer than half said they have installed antivirus or antimalware software, strengthened their passwords or backed up files on an external hard drive, all basic security precautions. Further, only one-third said they have enabled automatic software updates or turned on multifactor authentication, and just one-fourth have installed a virtual private network (VPN). As a small business owner, these are steps you can take today to protect your business and your customers. Likewise, individuals can also take these simple steps to protect their own online accounts.
But what about the higher ranking concerns like supply chain disruptions, labor shortages and inflation, or worse, a recession? All business owners know that markets are unpredictable. Who could have predicted the pandemic, or the rapidly changing energy markets as a consequence of the war in Ukraine? We see rising prices at the fuel pumps and in most retail outlets.
The first few months of the year have brought a flurry of layoffs, as companies like Pelaton, delivery company GoPuff and Netflix adjust to post-pandemic times. Online car dealer Carvana announced it will lay off 12% of its workforce, while Facebook has activated a hiring freeze. No business is immune.
Now is the time to look for ways to increase efficiency and make necessary cuts, a strategy that has been in place since the 2008 global economic downturn. I was in Rotterdam last week, interviewing leaders in the shipping industry, the first event since the start of the pandemic. In addition to the standard strategy, the head of BBC Chartering, Ulrich Ulrichs, had this advice: “We can find ways of coping with the impact of highly improbable situations through improved flexibility and faster decision making … and thus improve our ability to emerge stronger.” (And of course, put your cybersecurity protections in place now.)
Leslie Meredith has been writing about technology for more than a decade. As a mom of four, value, usefulness, and online safety take priority. Have a question? Email Leslie at firstname.lastname@example.org.