IBM’s latest Cost of a Data Breach report identifies phishing as the most common data breach vector, costing organizations $4.88 million on average.
Phishing attacks are nothing new, yet the extent of their impact only seems to get worse.
But did you know that many of them are preventable? Sometimes, all it takes to identify a phishing email or call is a few verifications to confirm the email originated from the sender or to check if it’s the number of someone from the company.
Of course, cyber awareness plays a key role in understanding and mitigating risks. And that is exactly what this article is all about. We discuss how businesses encounter phishing, the hefty financial repercussions, and the essential steps for avoiding them.
Phishing is a deceptive practice used to trick employees into revealing sensitive business data.
It is not just regular criminals who target organizations for this type of attack. Even disgruntled employees looking for revenge or competitors vying to outmaneuver your company could be behind a phishing attempt.
You can experience phishing through a variety of mediums—from emails and phone calls to text messages and social media DMs. Some could be relatively generic and unsophisticated, while many are complex in nature and aimed at specific individuals.
Prevalent ways your business could fall for phishing include:
● Malicious URLs
These are primarily designed to direct employees to spoofed sites and can appear in phishing emails and messages that imitate trusted sources.
For example, an email impersonating your company’s bank may provide a phishing link to log in to your online bank account. If you click it, it could direct you to a log-in page identical to the original one but created to steal usernames and passwords.
● Malware Attachments
Under the guise of business documents, proposals, and other important files, bad actors could persuade employees to download dangerous attachments from emails and messages.
These can contain malware, such as keyloggers, spyware, and ransomware, to steal and transfer sensitive business information from infected devices.
● Business Email Compromise (BEC)
These phishing attacks led to losses exceeding $2.9 billion in 2023, making it the second-costliest cybercrime reported to the FBI.
BEC involves taking over a business email account, usually of someone senior like the CEO or VP of Finance. This makes it easier for criminals to convince employees to share sensitive financial documents, account passwords, and other confidential data.
● Network Hacking
With many employees opting for remote work, using public Wi-Fi networks at cafes, restaurants, and airports has become commonplace.
Cybercriminals can take advantage of this by tricking victims into using compromised connections that allow them to infiltrate web traffic, monitor online activities, and steal business data from devices.
What Companies Stand to Lose
We all know that falling prey to a phishing attack can be costly. But the financial repercussions are not always so obvious and can vary depending on the type of threat a business encounters.
For example, let’s say a scammer gets hold of a company’s social media log-in credentials, takes over the account, and runs fraudulent promotions. Or what if they steal a customer database using a BEC attack and sell it on the dark web?
Both these events will yield substantial financial gains for the criminal, not necessarily out of the company’s pocket. But the cost of eventual outcomes could be a devastating financial blow to the business.
It could lose credibility in the eyes of customers, investors, lenders, and other stakeholders, and rebuilding its reputation can take significant work, money, and time. The company can also face costly operational disruptions as well as various fines and litigation costs as a result of a data breach.
Meanwhile, compromised intellectual property like customer data, formulas, and business strategies can impair the business’s competitive position. Security breaches also lead to increased insurance premiums, infrastructure, and other costs involving cybersecurity.
All these can add up to millions of dollars in the long run.
How Can Businesses Minimize Exposure to Phishing?
Here’s what you can do to protect your organization from phishing threats:
● Verify Critical Communications
You can often avoid elaborate impersonation schemes by authenticating business requests. For example, if you don’t recognize a phone number, find a verified number to contact the relevant person or organization and call them back.
Checking email addresses against the ones used in previous communications and conducting reverse email searches is important, too.
● Strengthen Digital Security
Security measures to protect data, devices, and network access are not just limited to firewalls and virus guards.
Essential steps also include adopting password protection and multi-factor authentication at the user level, installing virtual private networks to shield network traffic, updating software with the latest patches against vulnerabilities, and maintaining data backups to enable data recovery in case of loss.
● Establish Security Policies and Protocols
These provide a framework for employees to operate within, making it easier to set expectations in terms of security practices.
Policies must cover data capturing, storage, and sharing activities across all operational aspects, from finance to procurement. Pay particular attention to BYOD policies as well if you allow teams to work from home. Don’t forget to include escalation procedures in the event of an incident. You can also consider security requirements for suppliers and other vital business partners.
● Prioritize Cyber Awareness Among Employees
Employees have a key role to play in strengthening your organization’s security environment. Therefore, it is critical to conduct regular training and awareness programs to keep cybersecurity at the top of their minds.
Use these sessions to educate them about phishing trends, identifying potential risks, measures to avoid them, and the escalation process.
Assigning responsibilities and KPIs is necessary, too, especially to ensure accountability.
Wrapping Up
Each year, phishing costs millions of dollars to American businesses, both large and small.
These malicious attacks can be pretty elaborate and convincing and may appear in a variety of forms—from deceptive links and malware-laden attachments to BEC attempts and network hacking.
Whatever way your enterprise encounters phishing, the financial outcomes of falling prey can be fairly substantial. Fines, litigation costs, insurance premiums, IT infrastructure expenses, as well as costs involving reputational damage, operational disruptions, and loss of competitive edge can all cause a significant dent in your wallet over time.
This is why taking sufficient precautions to identify and mitigate phishing threats should be at the top of your business agenda. Authenticating critical communications, strengthening digital security, establishing airtight policies and procedures, and training employees are crucial for this.
