Cybercriminals take a common trope very seriously – for them, the sky is, indeed, the limit. As a result, ransomware attacks have (again) reached a record high in 2023, and it’s clear that small and medium-sized businesses (SMEs) are an increasingly popular target.
SMEs are often more vulnerable to cyberattacks than larger companies. The Lockbit ransomware gang member infamously said, “You can hit the jackpot once, but provoke such a geopolitical conflict that you will be quickly found. It is better to quietly receive stable small sums from mid-sized companies.” And, adding insult to injury, the enormous costs of cyberattacks can bring abrupt bankruptcy to fragile SMEs.
Why are SMEs more vulnerable than other businesses, and what can they do to prevent ransomware attacks?
SMEs have attractive data that appeals to ransomware attackers
In small and medium-sized enterprises (SMEs), several types of data can be tempting to hackers and raise the risk of becoming a target of ransomware.
- Customer information like names, addresses, phone numbers, and email addresses can be used for further phishing attacks or sold to other criminals.
- Financial data like company or customer’s credit card numbers, bank account details, tax reports, or financial statements can be used for financial fraud.
- Employees’ personal information can be used for identity theft.
- Intellectual Property like patents, trade secrets, and proprietary business information can be sold to competitors.
- Access credentials provide hackers with unauthorized access to systems and data.
Common malware types used to attack SMEs
Malware, or malicious software, is any type of program that can adversely affect computers or networks. Viruses, worms, trojans, spyware, and adware are classified as different malware types. But since ransomware can be easily delivered via email or malicious links, it’s one of the most popular attack vectors among cybercriminals. It comes in a few forms:
- Locker ransomware. This type of ransomware locks users out of their devices. It’s a relatively simple form, and in some cases, a cybersecurity expert may be able to restore access.
- Crypto ransomware. This type of ransomware encrypts users’ data, making it inaccessible without a unique decryption key. The hackers may or may not provide the key, even if you pay them.
- This type of ransomware destroys data on the infected system.
Each ransomware type is dangerous in its own way, causing damage to its victims.
What damage can ransomware do to SMEs?
Malware or ransomware attacks can cause significant damage to Small and Medium-sized Enterprises (SMEs):
- Complete exposure. Unlike larger organizations, SMEs often lack robust cybersecurity defenses. As a result, an attack can expose the entire company network, causing extensive damage.
- Growing threat landscape. The threat landscape expanded in 2023 with the emergence of new ransomware gangs like Royal, BianLian, and Play, alongside established players like Lockbit and Clop.
- Severe financial consequences. Ransomware attacks demand a ransom for the decryption key needed to restore encrypted data. Many SMEs don’t have immediate access to large sums of money and may need to borrow funds. This sudden financial strain can be detrimental, especially for businesses without substantial cash reserves.
- Operational interruptions. Ransomware attacks disrupt business operations, resulting in productivity and revenue losses. Such disruptions can be particularly damaging during critical business periods, such as expansion or market entry phases.
- Reputational harm. In today’s digital age, data security is paramount. If customers perceive that a business hasn’t adequately protected their data, it can lead to a loss of trust and reputational damage.
- Risk of data loss. Paying the ransom doesn’t guarantee data recovery. Less than 75% of ransomware victims successfully recover all their data after an attack, and that number may be declining.
How to reduce the opportunities for ransomware attack
To mitigate the risk of ransomware attacks, small businesses should concentrate their resources on areas where they can make the most significant impact at the lowest cost.
- Secure all devices and update software. Cybercriminals often target small businesses through unsecured devices and outdated software. These vulnerabilities can provide easy access to a company’s network. Therefore, securing all devices, including mobile phones, IoT devices, laptops, and desktops, is crucial.
- Secure the network with encrypted access. It’s dangerous to allow employees to share files or connect to the internet via insecure connection points. Remote employees should know how to use virtual private networks (VPNs) to block malware and protect your business network against intrusions.
- Acknowledge the threat. Many small business owners are unaware of the extent of cyber threats. Ignoring the risk of cyber attacks can leave a business vulnerable.
- Train employees. Employees may be too busy to undergo cybersecurity training. However, businesses must recognize the urgent need for ongoing, comprehensive cyber-risk training.
- Allocate IT resources. Businesses with limited IT resources may struggle to implement necessary security measures, such as data backup and network security.
- Make a plan. Compile an action plan to prepare you and your staff for a cyber incident. Consider taking out a cybersecurity insurance policy. Insurance companies can often help you tighten your cybersecurity and cover ransom payments and other costs, such as data recovery or legal fees.
While SMEs must invest in robust cybersecurity measures, IT and tech spending can become a considerable burden on a business that may be fragile or at a vulnerable stage in its life cycle. However, remember that technology is only part of the solution; people and processes play a significant role in preventing ransomware attacks, and it’s vital that you get all aboard.