Today, small companies are far more vulnerable to data breaches than their larger counterparts, and in addition to this added threat, many who suffer these incidents may also see the people or clients affected by them have more problems in the future.
Last year, 23 percent of all victims of data breaches also ended up becoming fraud victims as a result of the incidents, according new data from Javelin Strategy and Research. This was largely the result of criminals who tried to cause data breaches becoming more successful in gaining access to large amounts of information all at once, as well as more successful in causing them. In all, there were a total of 1,611 data breach incidents spotted in the U.S. last year, up 48 percent from the year before, and it’s believed that about three out of every four such incidents is the result of someone having a financial motivation to cause them.
One such data breach, not suffered by a small business, but rather a government entity, shows just how damaging these incidents can be, the report said. A breach of the South Carolina tax collection agency’s databases exposed millions to potential identity theft, and the average person affected by this incident spent $776 and 20 hours trying to resolve the fraud they suffered as a result of having their personal information exposed. Altogether, financial institutions and businesses ended up paying some $5.2 billion to cover the fraud costs associated with this incident.
What can small businesses do to protect information better?
The problem that data breaches pose for small businesses is obvious: These incidents can hit at any time and consequently lead to significant costs that can endanger their very existence. However, there are a number of things all companies can do to better protect themselves from these potentially harmful incidents, the report said. One of the easiest is to regularly change passwords and who has access to what information that may be stored for companies, clients or customers. This will better serve to protect it from being exposed by someone who might not have the best understanding of how to keep this data safe.
Moreover, companies should also take the time to make sure that they are doing all they can to encrypt the sensitive data that they could not afford to have exposed, the report said. This will help to ensure that even in the event of a data breach hitting them, the likelihood that the information will be able to be used against victims – potentially racking up millions of dollars worth of fraudulent debt in more extreme cases – is significantly reduced.
Perhaps more important, though, is the idea of putting into place general security checklists for employees to follow when moving data from one place to another, the report said. One of the problems that many small businesses have in preventing data breaches is that they feel they do not have the time or resources to properly train staff on the right procedures to protect sensitive information, but putting the steps in the form of a checklist can help to make it easier to understand without going through an actual training process.
Many small businesses also cannot afford to hire IT professionals to help protect their companies, but they might be able to obtain small business insurance policies that help them cover costs when data breaches might occur. Tech insurance of this type can help to significantly mitigate the amount they have to pay to remediate data breaches for clients, customers, and themselves.