Why cybersecurity should be at the center of risk management

The high cost of a cyber breach, from assets to reputation, makes thorough risk assessments critical for small businesses.

Risk management is broadly thought of as a business’ ability to assess and mitigate financial and strategic risks for itself. It’s a big definition, in theory spanning everything from economic uncertainty to natural disasters, and including matters that are in and outside of owners or administrators’ direct control.

Of course, the particulars of risk management will vary depending on the organization or industry. But what shouldn’t vary is a commitment to putting cybersecurity measures at the center of these processes.

Why are cyber breaches such a risk for small businesses?

Businesses do a number of things to manage risk, but they might wonder why cyber concerns should be at the top of their list. To start, the numbers tell a worrying story.

Cybersecurity breaches and cybercrimes cost the global economy trillions of dollars each year, studies estimate. They often happen even when a business thinks it’s too small to be a target or that it’s done all it can to protect itself. And according to research from IBM, more than 80% of businesses will be impacted by a cyber breach at least once, but probably more than that.

In the U.S., IBM noted, the average cost of a breach was just over $9.4 million last year. Another study led by the Ponemon Institute observed that the cost of a data breach shot up by 10% between 2020 and 2021.

It’s not just money that could be lost.

Threats that aren’t quickly discovered and contained can act as not only a money drain but a reputational one, too, permanently damaging a business one way or the other. Customers whose data is impacted will be wary about continuing to trade with a company, and the same goes for suppliers, partners, and even team members.

Small businesses with “trade secrets,” proprietary information, or sensitive intellectual property have even more to lose. And because medical, dental, or other wellness clinics may also be small businesses or small corporations, a breach may put such an organization in violation of HIPAA regulations and other guidance.

What can small businesses do to manage risks?

Risk management tends to fall under a few categories that can be engaged all at once:

• Avoidance behaviors, or not doing things that will put a company in harm’s way. A simple example of this is limiting the customer data you collect to only the minimum necessary.
• Reduction strategies or mitigation, which minimize potential losses from risky activities as opposed to simply avoiding or eliminating them. Risk reduction in cybersecurity includes things like updating your software systems to ensure they are current, regularly backing up your data, adopting antivirus software or putting up firewalls, and even getting employees involved with risk assessment and prevention.
• Sharing or transferring risks. Many businesses don’t think about the fact that cyber risks can be transferred, at least with the right processes in place. Cyber insurance is one example of a risk transfer strategy. It’s worth engaging a skilled IT consultant who can help walk you through the fine points of such policies, what your responsibilities are, and what they do and do not cover.

Furthermore, all key stakeholders in a company need to participate in the process of developing and maintaining cybersecurity protocols, as well as identifying and rating the risks to the business.

Understanding your risks to mitigate them

As a responsive, knowledgeable resource, Skinner Technology Group offers risk and vulnerability assessments that help you know where you are and where you need to go in order to achieve maximum safety in your business. Get in touch with our team today to get started on an individualized and industry-specific look at your risks.