10 Ways Hackers Can Hurt Your Business

Failure to safeguard valuable data can cost a business millions. Cyber attacks continue to grow, impacting businesses across the world. Few brands are safe, and large companies with significant online targets are common targets. About 6% of businesses report having to settle ransom to restore access to critical IT systems. Apart from causing financial losses, cyber attacks can disrupt operations and business practices. Understanding the real impact of hacking on your business can help you take preventive steps. Here are some ways hackers can ruin your business.

  1. Reputational damage

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While hard to accurately quantify, businesses that experience cyber attacks notice that their brand reputation drastically reduces. Consumers and suppliers may feel insecure leaving their sensitive data with a hacked organization. The retail giant Target witnessed its reputation evaporate into thin air after a 2013 data breach incident involving the credit card information of some 40 million customers; the security failure attracted massive costs to settle. JPMorgan Chase & Co (JPM) also struggled with a similar issue in 2014 when hackers compromised the banking data of its customers. Cybercriminals managed to access sensitive details like customer phone numbers, email addresses of 76 million accounts, and small business information. Beyond reducing institutional trust, studies show that hacked publicly traded companies are likely to see a drop in market value in the short term. Comparitech security researchers found out that share prices of compromised companies listed on the New York Stock Exchange fell by 3.5% following an attack.

  1. Revenue losses

One negative impact hackers can create on your business is financial loss. A sudden drop in revenue is bound to happen since conscious customers usually take measures to protect themselves from cybercrime. A business can also lose money to cyber criminals on a mission to extort their victims. Ransomware attacks can render systems useless and cost a company millions should they opt to pay. Such cybercrime occurs when hackers gain access or hijack some elements of a target business network. They can execute any malicious actions to steal data or lock systems in demand of payment. Cybercriminals can threaten to leak or sell sensitive information if a hacked company does not meet its demands.

  1. Data Destruction

One active malware can carry out a wave of attacks, destroying data and causing vital systems to fail. Data destruction is when attackers choose to wipe out or corrupt important business files. This can make it hard for a business to access customer information. This may cause them to struggle to fulfill contracts. It can also make an organization liable for damages. Another way hackers can hurt your business is by damaging hardware and making it impossible to use its computers. Repairing this kind of damage can be overwhelming and sometimes impossible. You don’t have to gamble with the threat of cyber attack and the data destruction risks it can present for your business. Investing in backup systems and cutting-edge IT security protection can safeguard your precious data.

  1. Increase costs

Organizations that want to protect themselves from hackers have to invest more in cybersecurity, which can increase costs. Businesses may incur additional costs due to high insurance premiums. Ransomware attacks that prevent employees from accessing IT systems can also cause a major financial burden. 6% of businesses paid a ransom in 2019, attracting a staggering loss of $382 million, according to Hiscox. You may also have to hire lawyers and other professionals like cybersecurity experts to stay compliant with cybersecurity regulations. That said, shelling out more money for attorneys and damages relating to civil cases against your company can be expensive. Leading credit bureaus like Equifax had to learn the hard way after experiencing a data breach in 2019 that compromised the personal data of millions of customers. The company had to pay over $400 million to affected individuals due to subsequent litigation.

  1. Operational disruption

In addition to financial damages, companies may have to deal with indirect costs, such as major interruptions to operations that impact revenue. Cybercriminals can use several strategies to handcuff a business’s normal operations. For instance, completing various tasks may be impossible if they infect computer systems with malware that deletes high-value information or install malicious code on websites that render your website inaccessible. Disrupting business activities is the ultimate goal of hacktivists, who are notorious for breaching the computer systems of government agencies and multinational corporations to send a message out there. In 2010, for instance, pro-Wikileaks hackers disrupted credit card processing companies Mastercard and VISA by temporarily crashing their websites.

  1. Potential business closure

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Hackers can hurt a business in more than just monetary ways; they can force a business to shut down in the worst cases. Therefore, entrepreneurs need to rethink their methods for collecting and storing sensitive information. Many organizations have stopped storing customers’ financial and personal data, like social security numbers and date of birth. Some e-commerce operators have also closed their online stores because they cannot adequately prevent cyberattacks. These days, buyers want to know if a business manages these issues, and many are more likely to stick with those that prioritize cybersecurity.

  1.  Intellectual property theft

A business’ designs, technologies, and proven marketing strategies are valuable assets. According to Ocean Tomo, intangible assets, including intellectual property, accounted for 87% of the S&P 500 companies in 2015. Many businesses use the cloud to store intellectual property; however, these platforms are not fully immune to attacks. Nearly 30% of U.S. companies reported experiencing intellectual property theft staged by competitors. Any person who uses a computer connected to the internet is prone to cyber threats. Online criminals frequently use phishing scams, spam, and malicious websites to deliver dangerous software to computers and compromise data security. Hackers may also try to access private information if your systems are not firewall-protected. They can track conversations and tamper with the back end of your website. Predators can use a bogus identity to lure your business into revealing sensitive details like intellectual property and financial data. Protecting your company’s intangible assets against cyberattacks is important if you want to stay a step ahead of the competition.

  1. Legal consequences

Cyber breaches can have legal consequences. Data protection and privacy laws require companies to properly handle the security of all personal data they collect, including that of staff and customers. You may face heavy fines or sanctions if it emerges that a cyber attack happened because you did not deploy robust security measures. Therefore, learning how to manage the risks is highly important. A cyber security expert can perform a variety of checks to identify vulnerabilities in your IT systems. Having a cybersecurity action plan is a good thing that can help you reduce the impact of an attack, report incidents to the appropriate authorities, clean affected systems, and get your company up and running as soon as possible. Investing in user training, education, and cybersecurity awareness in your organization should be an ongoing routine.

  1. Loss of competitive advantage

Data theft can present serious issues for businesses and individuals. The effects of hacking can also include loss of competitive advantage. Losing valuable business data to thieves can impact your brand authority, resulting in diminished reputation and poor sales. It can also bring embarrassment to the victims if the stolen data involves sensitive subjects. Plus, hackers can exploit passwords and usernames to compromise other computers. Changing passwords and usernames is a good idea to keep the bad guys at bay. Avoid revealing login information when you are unsure about the person or website asking for the details. 

Additionally, don’t hesitate to contact IT professionals when you suspect your account has been compromised. Your IT department or a third party can take action to reduce the damage resulting from an attack. Hackers can take advantage of flaws in your computing technology to assess systems without any authorization. One way to reduce these risks is to update your software and pay attention to security fixes that software developers roll out. You can use a firewall to limit cyber attackers’ ability to access computers across the internet. Consider installing antivirus software to detect and restrict automated malicious programs.

  1. Identity theft

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Identity theft can happen when another party uses your data, like your social security or credit card number, to commit fraud without your knowledge. Fraudulent purchases can happen if cybercriminals steal customers’ credit card information. While the scale of attacks may vary, businesses should never overlook the essence of minimizing risks posed by digital criminals. Be vigilant and educate your team about the best practices to prevent identity theft, making it hard for hackers to steal confidential data or inflict harm on critical systems. Additionally, it would help if you invest in reliable cybersecurity solutions to reduce the impact of hacking when it happens.

Businesses are prone to the attacks of cyber criminals, regardless of their size or experience. Not only can they inflict severe financial losses, but there’s also the issue of reputational damage and severe legal sanctions. Therefore, make it a point to understand the various kinds of attack and how to protect your business. 

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About Dequiana Jackson

Dequiana Jackson, Founder of Inspired Marketing, Inc., helps overachieving women entrepreneurs conquer limiting beliefs and create marketing plans that grow their businesses. This includes one-on-one marketing plan development, digital product creation, web design and content marketing. Dequiana is the author of Know Your Business: How to Attract Ideal Clients & Sell More and runs the award-winning blog, Entrepreneur-Resources.net.

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