Small to medium-sized businesses (SMBs) are increasingly finding themselves at the center of cyberattacks, making cybersecurity no longer optional but essential. Recent statistics reveal that over 50% of all cyberattacks target SMBs, yet a staggering 83% of these businesses lack sufficient cybersecurity measures or cyber insurance. This gap is proving costly—not just for the SMBs but for the larger companies that rely on them as vendors or subcontractors.
The Growing Demand for Proof of Cybersecurity
As third-party data breaches become more frequent and severe, large companies are stepping up their compliance requirements. Vendors and subcontractors are now being asked to provide proof of cybersecurity efforts and cyber insurance as a prerequisite for doing business. This shift reflects the growing recognition of the risks posed by insufficiently secured third-party providers, whose vulnerabilities can lead to far-reaching impacts on supply chains, legal exposure, and financial losses.
New Federal Mandates
Additionally, a new Executive Orders has directed various parts of the federal government to adopt a multitude of cybersecurity contract requirements and standards from artificial intelligence tools and layered authentication methods. Notably for contractors, they will see a new system for validating all federal contractors and software suppliers to ensure adequate cybersecurity practices. 58% of breaches impacting the top 100 U.S. federal contractors involved third-party attack vectors, highlighting a critical vulnerability in the government supply chain.
SMBs: Attractive Targets for Cybercriminals
Many small business owners mistakenly believe they are “too small” to be targeted by cybercriminals. Unfortunately, the opposite is true. SMBs are seen as low-hanging fruit because they often lack robust security measures, making them easier to breach. Furthermore, SMBs that serve multiple clients are particularly attractive targets due to the volume of sensitive information they handle. These vendors often store high-value personally identifiable information (PII), such as credit card numbers, Social Security numbers, addresses, tax records, and medical data—a treasure trove for cybercriminals.
Consumer Expectations and Reputational Risks
The consequences of a data breach extend beyond immediate financial losses. According to a recent report by Vercara, 44% of consumers attribute a cyber incident to a company’s lack of adequate security measures. Even more concerning for SMBs, 75% of consumers say they would sever ties with a company following a data breach. For businesses reliant on their reputation and customer trust, the stakes couldn’t be higher.
Staying Competitive in a Changing Landscape
For SMBs, implementing robust cybersecurity measures is no longer just about risk mitigation; it’s about staying competitive. Companies that fail to meet the growing demand for cybersecurity proof risk losing out on contracts and partnerships. By investing in security measures and obtaining cyber insurance, SMBs can position themselves as trustworthy partners and reduce the likelihood of devastating breaches.
Taking Action
To meet these new expectations, SMBs should consider:
1. Investing in Cyber Insurance: Protect your business from financial losses associated with data breaches and cyber incidents.
2. Employee Training: Educate staff on recognizing phishing attempts and how to respond to cyber attack attempts.
3. Email Threat Protection & Network Intrusion Monitoring: Ensure network and email safety with real-time detection and alerts for suspision activity.
4. Endpoint Detection & Response: Deploying EDR safeguards with AI capabilities to continuosly detect illigitimate activity on your devices.
5. Regular Updates and Monitoring: Keep software and systems updated, and monitor for unusual activity that could signal an attack.
As cybersecurity continues to be a key focus going into 2025, SMBs that fail to prioritize cybersecurity risk not only their own survival but also the businesses and consumers that depend on them. By taking proactive steps now, SMBs can protect their operations, safeguard their clients, and ensure their long-term competitiveness in a digitally interconnected world.