Delta Insurance has recently released a whitepaper discussing the evolution of cyber threats, in order to help New Zealand SMEs manage their cyber risk.
The whitepaper warned that while New Zealand’s ability to adapt quickly to the digital revolution has allowed for international economic growth, this has also provided opportunity for hackers to exploit digital weaknesses.
18% of New Zealand small businesses have faced a cyber attack [Delta Insurance, 2018]
While the level of cyber security awareness is increasing, New Zealand business owners are still failing to take action to improve their current risk management strategies in this area:
- Only 6% of SMEs in New Zealand hold cyber insurance
- 88% of New Zealand companies are unaware that they can purchase insurance against a cyber incident
Many business owners assume that the geographical location of the country limits the probability of a cyber attack. However, this is clearly not the case. New Zealand’s global footprint is ever-increasing and the nation’s increased dependence on Internet infrastructure means that New Zealand businesses are very exposed to cyber risk.
How Much do Cyber Incidents Cost?
Losses incurred as a result of a cyber attack can be significant and far-reaching. Costs that are incurred immediately can include legal fees, customer notification costs, investigation costs, PR expenses and potential business interruption costs. Other long-term costs to the business are often the result of reputational damage, which can lead to a loss of competitive advantage, customers and revenue.
Cyber Risk Management Strategies
There are a number of steps that SMEs can take to reduce potential losses as a result of cybercrime. First, it’s important to take the time to determine the specific threats to your organisation as this can help you be prepared in the event of an incident. If a cyber breach is reported early, resulting losses are often much lower.
- Company Culture: In most cases, hackers target the weakest links in the company – the people who are using the system. As such, it is important to create a strong company culture surrounding cyber security awareness, to ensure every employee knows how to best protect the business from this threat. Cyber threats are consistently evolving, so regular cyber training and ongoing employee communication is essential.
- Disaster Recovery Planning: An effective disaster recovery plan is a vital component of any organisation’s cyber risk management. Identifying potential risks and pinpointing the significant parts of your business will help to prepare you for a quick recovery. Organisations that have a proven disaster recovery plan for cyber attacks tend to have lower overall costs than those that do not.
- Cyber Insurance: The demand for cyber insurance is rapidly increasing. More and more often it is becoming a compulsory requirement for organisations, particularly if they’re involved in technological services or hold large amounts of customer data. Cyber insurance is designed to help companies mitigate their cyber risk exposure by offsetting costs involved with recovery after a cyber-related security breach or similar event.
For more information on reducing your business’ cyber risk, speak to us today.