Today cybercrime is posing an incredible risk to business owners nationwide. While seemingly inconspicuous, cyber attacks are very much present, affecting nearly 800,000 individuals per year, costing about $8,700 per small business targeted.
Simple, low-cost cyber-attacks can cost a business $25,000 or more. Regardless of size or stature, every company is at risk of hacking and can benefit from taking steps to protect their business.
What is Hacking?
Hacking is a method of illegally taking over a system, encrypting confidential data or turning off crucial systems, preventing you from doing business. Company data, which may include inventory or client lists, payment information, business revenue and many other important lists of information, is incredibly valuable to business owners — and even more valuable to hackers fishing for ransom payments or identity theft.
There are five common methods of hacking:
- Phishing Scams: A means of stealing user data like login credentials and credit card information, phishing occurs when a hacker, disguised as a colleague or client, deceives a victim into clicking a malicious link, email or text, which can lead to the installation of malware and freezing of the system.
- Website Spoofing: Website Spoofing is creating a replica of an existing website with the intention of bringing visitors to a phishing site.
- Ransomware: Ransomware is when encrypted data is held for a fee, this can occur after a phishing scam or malware enters a computer system.
- Malware: Malicious Software or malware is an intrusive operating system designed to damage or destroy a computer system. This can include viruses, spyware, adware or other dangerous programs.
- IOT Hacking: Hacking through the Internet of Things or non-computer devices that connect to the internet. There are billions of IoT devices, and they are a growing target as many lack adequate security.
Attacks are growing in intensity and frequency. The average ransomware payment increased by 82% in 2021, reaching up to $570,000, and it is estimated that a business will fall victim to a ransomware attack every 14 seconds. Hackers target organizations of all sizes, 20% of ransomware victims being small to mid-sized businesses. A large portion of these crimes stem from data breaches.
How Cybercrime is Hurting Distributors
Distributors have many critical lists of data that are of interest to hackers. If hackers access customer lists, they may have access to compromising information about their businesses, or even payment information — allowing them to subsequently attack your customers. With access to company financial information, a hacker may sell that information to competitors. Hackers can also shut down crucial computer systems so that no business can be done, forcing distributors to pay the ransom or to seek help elsewhere.
Distributors face a wide variety of threats, each with detrimental effects on conducting business. But regardless of the growing scale of these crimes and criminals, companies can take steps to defend themselves.
How to Keep Your Business Safe
Business owners need to have a security plan to protect themselves. Most businesses are ill-prepared for cyber attacks, and the rise of technology brings along new risks. IT systems teams need to be briefed on all procedures, and business owners need to assess every avenue through which a hacker could enter their computer system.
Good cybersecurity habits include:
- Rotating Passwords: resetting or limiting the lifespan of a password. This reduces vulnerability to attacks or leaks of passwords by shortening the time where a specific password is at risk of being stolen.
- Having a strong password policy: Creating criteria to strengthen passwords, this could be making them at least 8 characters long and excluding any personal information.
- Updating software: Ensuring that software is up to date will patch up any holes in security.
- Training for onboarding employees: Basic security training should be included in onboarding procedure, encompassing risk assessment, good security habits and procedures should there be security breaches. This ensures all employees are up to date and can assist in keeping a business safe.
- Implementing verified technologies: Technologies that are verified through processes like SOC 2 abide by security requirements that ensure they will keep data safe.
SOC 2 Compliance
SOC 2 is an auditing process that makes certain a service provider safely manages a business’s data. This insight was developed by the American Institute of Certified Public Accountants (AICPA) and was specifically designed for service providers storing data in the cloud. Using systems that are SOC 2 certified will ensure that adopting technology does not bring additional risk.
There are two SOC certifications that offer compliance standards: 1 and 2. SOC 1 scores an organization’s internal controls pertaining to financial statements by customers. SOC 2 scores an organization’s internal controls that protect customer data, and leaves a score based on the five trust principles.
These audits were developed back in the early 1970s when the AICPA released the Statement on Auditing Standards (SAS1). This clearly defined the independent auditor’s role and responsibilities. New criteria continued to develop until 1992 when they reached SAS 70. As companies continued to develop and digitize things like payrolls and financial information, new criteria were needed to ensure data safety.
SOC 2 guidelines ensure the institution can defend itself against cyber attacks and prevent breaches from occurring. Audits are performed by Certified Public Accountants (CPAs) and a certification ensures a software complies with guidelines. SOC2 reports bring to light how a system manages data and how well they comply with trust principles.
Trust principles include:
- Security: This refers to protection of data against unauthorized access.
- Availability: This refers to availability of the system, products or services.
- Processing integrity: This refers to whether a system achieves its intended purpose.
- Confidentiality: This refers to whether data is restricted to a particular group of individuals, as opposed to accessible by everyone.
- Privacy: This refers to the system’s collection and storage of personal information.
Business owners can ensure that security is optimized through SOC 2 compliance, when incorporating new systems and technologies. For businesses looking to minimize risk, pursuing tools that are SOC 2 compliant will do just that. With the adoption of technology, many organizations are optimizing efficiency and streamlining business functions, but with new devices come new dangers. As business owners continue to modernize their organizations, they need to be mindful of the risks, and take steps to protect themselves.
As our evolving world brings us new innovations it also brings us new risks; however, distributors are not without measures they can take to ensure their organization’s security. With the right practices, business owners can remain safe and look forward to the changes that come.