Nearly 80 percent of small-business (SMB) owners don't have a cyberattack response plan, even though more than half were victim to at least one type of cyberattack over the past year, according to Nationwide's Small Business Indicator survey.
About 60% of those who did experience a cyberattack said it took longer than a month to recover. By contrast, of those who have not encountered a cyberattack, more than half (57%) think their company could recover within a month, according to the survey.
The national survey was conducted online by Harris Poll on behalf of Nationwide from June 10-23 2016, among 502 US small-business owners with fewer than 300 employees.
“Small businesses are not prepared for cyber events because pretty much all they are seeing in headlines are large corporations,” says Karen Johnston, casualty technical consultant for commercial staff underwriting at Nationwide. That gives them a false sense of security because they think that cybercriminals only attack large corporations. SMBs might think they don’t have information cybercriminals would want, but that is far from the truth, she notes.
“Small business owners accept credit card payments, collect personal information from employees and customers, have websites, and do online banking. All of these activities create opportunities for cyber criminals to obtain the information they are looking for,” Johnston says.
Improving cybersecurity for America’s 28 million small businesses has been a top priority for the House Small Business Committee, which held hearings in April and July 2016 that featured testimony from cybersecurity experts and small business owners about the threat. In September, the House passed bipartisan legislation, the Improving Small Business Cyber Security Act of 2016, which gives small businesses access to additional tools, resources, and expertise to help protect their sensitive electronic data from cyber threats.
“The reality is small businesses have fewer resources to invest in proper data protection and security controls; that definitely makes them an attractive target than larger corporations,” Johnston says.
According to the Nationwide survey, 45% of small-business owners who do not have a cyberattack response plan in place said they don't feel their company will be affected by a cyberattack (compared to 40% last year).
Still, the majority of respondents (68%) are at least somewhat concerned about a potential cyberattack affecting their business. Fifty-four percent of the businesses were victim to at least one type of the following attacks:
- Computer virus (37%)
- Phishing (20%)
- Trojan horse (15%)
- Hacking (11%)
- Unauthorized access to customer information (7%)
- Unauthorized access to company information (7%)
- Issues due to unpatched software (6%)
- Data breach (6%)
- Ransomware (4%)
Nationwide recommends that small-business owners protect their organizations by incorporating the following procedures:
- Guard your physical perimeter to prevent hackers from accessing sensitive data and your company’s computer network;
- Educate your employees about cyber awareness;
- Activate your firewall;
- Install and regularly update antivirus, malware and spyware software;
- Use strong passwords of 8-10 characters that include letters, numbers, and special characters and update them regularly;
- Secure your Wi-Fi networks;
- Set social media profiles to private and check your settings;
- Encrypt your sensitive data, make a back-up and store it in a fire-proof safe off-site;
- Carefully select online computing services;
- Acquire cyber insurance to cover losses in the event of fraud or breaches.
Interestingly, the survey respondents included 190 Millennials (ages 18-35), 152 Gen Xers (ages 36-50), and 106 Baby Boomers (ages 51-65). Millennial small-business owners are seemingly the most concerned generation in recent history when it comes to preparing for the future. More Millennials have a written cyberattack response plan in place (42%, versus Gen X (17%) or Baby Boomers (12%), according to a Nationwide survey of Millennials.