While cyber risk is something organizations of all sizes face, smaller companies are particularly vulnerable. According to the Hiscox Cyber Readiness Report, 41% of small businesses fell victim to a cyber-attack in 2023. As technology continues to evolve and advance, this number is only expected to rise.
Some of the cybersecurity risks that small organizations face include data breaches, financial losses, operational disruptions, reputational damage, and compliance fines. It’s essential that decision-makers understand the breadth of these risks and take measures to proactively reinforce their infrastructure.
The question becomes whether to hire and maintain a dedicated in-house security team or outsource this critical function to a third-party provider.
SIZE MATTERS
Organizations of varying sizes are affected differently by cyberattacks. According to the 2024 Verizon Data Breach Investigations Report (DBIR), 46% of all cyber breaches impact businesses with fewer than 1,000 employees. That report also noted a higher correlation between the number incidents and those resulting in a data breach among smaller companies with under 1,000 employees.
Research by IBM found that companies with fewer than 500 employees saw a 13.4% increase in average losses resulting from data breaches. Companies with 500 to 1,000 employees and those with 1,001 to 5,000 employees saw a rise of approximately 20% in losses.
The IBM report also revealed that the average amount of money lost by businesses due to cybercrime in 2023 was $1.3 million. While an enterprise-level organization may be able to recover from a loss of this magnitude, for small to mid-sized companies, it could be fatal.
IN-HOUSE VS. MANAGED
Cybersecurity is an area where cutting corners has been demonstrated to be fraught with risk. A cybersecurity program must be fiscally appropriate while providing reasonable assurance with respect to mitigating cyber risk. The end result provides appropriate balance between cost and security that considers the risk appetite of the organization.
There is an extensive effort involved in managing a Security Operations Center (SOC) in-house, including organizing and tiering teams, developing processes, and learning from past interactions with environmental behaviors and threats. Hiring a cybersecurity team can be expensive and operating a 24x7x365 operation requires a minimum of seven or eight analysts. This is a significant expense, and that’s before considering the cost of the acquiring and implementing tools and technologies needed to combat cyber-attacks.
Some companies opt to purchase insurance specifically for cyber breaches and attacks, however filing a successful claim can be difficult as these policies contain many exclusions, limitations and pre-requisites. In the end, cyber insurance represents only one of the four ways to treat risk and should not be relied upon exclusively.
Today, the focus of bad actors is on leveraging automated tools, artificial intelligence, and ransomware-as-a-service to target smaller businesses. This makes cybersecurity much more challenging. Outdated security measures simply aren’t effective against sophisticated attacks using ‘nation state’ grade tools and techniques. And for budget-conscious small businesses, investing in the type of technology required to “fight fire with fire” is either not economically sound or isn’t feasible at all.
Using an outsourced SOC is proven and cost-effective, providing 24x7x365 expert monitoring with cutting-edge technology, minimizing stress and mitigating risk. Furthermore, partnering with a Managed Security Service Provider (MSSP) like Marcum Technology also provides access to expertise and advice, as well as guidance and strategies to address multiple problems beyond just one singular issue.
REAL RISKS OF INADEQUATE CYBERSECURITY
It’s easy for small companies to fall victim to fraud because they often don’t have the right measures in place to prevent it. The fallout from a successful cyber-attack can be devastating in several ways.
FINANCIAL IMPACT
Small businesses are often easy targets for cyber criminals because of their lack of resources and inadequately secured infrastructures. Bad actors know they can make a quick profit with minimal effort by targeting a smaller company. For instance, two hours of effort with ransomware purchased online could easily result in a quick $10k ransom for an attacker.
In fact, 51% of small businesses that fall victim to ransomware will ultimately pay the money, as they feel they have no other choice. The cost of forgoing the ransom payment and rebuilding their network is simply too high.
REPUTATIONAL DAMAGE
A good reputation is essential for building trust with clients, and neglecting security measures can damage that trust irreparably. This is especially important for businesses that hold sensitive data or are relied upon for financial transactions. The fact is, 87% of small businesses have customer data that could be compromised in an attack.
Cloud security is also a significant concern as more small businesses are migrating to cloud computing environments. Cybercriminals can exploit various vulnerabilities to gain unauthorized access and compromise the integrity and confidentiality of sensitive data. A resulting breach can destroy a company’s public image.
COMPLIANCE
Finally, there are the legal ramifications and regulatory penalties a company might face for not adequately safeguarding sensitive customer information. Various legal and regulatory requirements can potentially levy hefty fines for failing to properly secure sensitive data. Many states allow consumers to seek legal action against businesses for damages incurred because of cybersecurity breaches. Class action lawsuits and subsequent settlements of this nature have cost businesses millions of dollars to date.
BENEFITS OF A MANAGED SOC
Outsourcing SOC management to a service provider is recommended for small businesses for a variety of reasons.
- Cost-Effective: Building and maintaining an in-house security team is expensive. An MSSP offers access to security experts and leading-edge technologies that a smaller organization may not be able to afford otherwise.
- 24x7x365 Coverage: Cyber-attacks don’t always happen during normal business hours. Security teams must be hyper-vigilant about monitoring systems and infrastructure around the clock. With an outsourced SOC, you get 24x7x365 coverage from experts with diverse experience and skills sharpened by seeing threats come up across a variety of organizations.
- Proactive vs. Reactive: The best way to defend against cyber-attacks is to prevent them from occurring in the first place. This can be difficult with an internal team that lacks technological resources and is already stretched thin with IT tasks. External SOCs have access to advanced threat intelligence and are prepared to address issues proactively, helping analyze and recommend actions based on the data collected.
- Advanced Tools/Technology: SOCs employ cutting-edge technology to keep your environment safe, such as the use of AI and Security Information Event Management (SIEM) tools to autonomously detect and respond to abnormalities in a company’s environment.
- Visibility: In cybersecurity, visibility is crucial, but it also requires a lot of time and effort to manage. A SOC acts as a filter, sending only the most important alerts to clients, saving them time and resources.
CHOOSING A SOC
An effective SOC can be a helpful partner for businesses, providing insights on areas of concern and the types of logs being monitored. They also can offer security awareness training, endpoint protection, and vulnerability management.
Not all SOCs are created equal. In the current cybersecurity landscape, there are many that prioritize commercial success over security. The key components of a well-functioning SOC are skilled professionals, established processes, and vetted security tools. Decision makers should also evaluate a SOC candidate’s Service Level Agreements (SLAs)—specifically mean time to detect incidents, time taken to work on incidents, and overall time from inception to closure. And finally, asking for examples of analysis and escalation should provide insight into a SOC team’s efficiency and competency.
A TEAM DEDICATED TO YOUR CYBERSECURITY
With Marcum Technology’s Managed Security Services you’ll have an entire dedicated team of cybersecurity professionals in your corner, utilizing the latest in cyber defense technologies to protect your business 24 hours a day, 365 days a year. This is a cost-effective option to managing security in-house or dealing with the consequences of a breach.
You’ll also enjoy access to a team of experts who bring a wealth of experience and iterative learning to effectively address security threats. Our seasoned veterans are ready to partner with you, providing strategic advice and personalized guidance based on your specific security needs.
These days, it’s not a matter of if your business will become the victim of a cyber-attack, but when. Don’t wait until it’s too late. Fortify your defense with the Managed Security Services at Marcum Technology.
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