Why the Benefits of Cybersecurity Go Beyond Safety

Customer data, cloud systems, email, and software are all essential tools for small businesses. So it’s important to safeguard these systems — and the data they contain — with a solid cybersecurity program. A recent study suggests that doing so can have business benefits beyond safety.

Businesses of all sizes are vulnerable to cyberattacks. Companies that prepare to defend themselves against these attacks are more likely to perform better financially. While the study focused on large, public companies, there are useful implications for small business owners.

Openly discussing cybersecurity is good for business

The study’s authors suggested that cybersecurity is central to an organization’s risk management and overall business strategy, and it’s a main driver of financial performance. For instance, when a company experiences a cyberattack and doesn’t clearly explain how it’s addressing the issue, the lack of candidness can erode customer trust and send a negative message to shareholders, the authors wrote.

The study used data from conference calls held by top-tier U.S. public companies from 2000 to 2023. Researchers developed an algorithm to search call transcripts for cybersecurity-related keywords. This allowed them to examine how companies described their cybersecurity risks and how those risks affected their market valuation.

Researchers found that cybersecurity readiness in the current year positively affected a “return on assets the following year,” according to a Binghamton University news release about the study.

“We found that if the firms are more open about the situation and make it known they are attempting to do something about it, that will increase stakeholder trust and the firm will perform better,” said Thi Tran, assistant professor of management information systems at Binghamton University and co-author of the study.

How to embrace cybersecurity 

Cyberattacks can happen to any small business; taking steps to protect yours is crucial. You don’t need a large security budget. Here are some tips from the U.S. Federal Communications Commission and the U.S. Small Business Administration:

Train employees

Employees and communications platforms are among the top sources of data breaches. Create security policies that require strong passwords, establish internet-use guidelines, and set penalties for violating them. Train employees to spot phishing emails, avoid suspicious downloads, and protect sensitive information.

Use secure networks

Add firewalls and encryption to secure your network, and use a secure, hidden Wi-Fi network. If you or your employees work from home, use a virtual private network, or VPN, to securely connect to networks, wherever remote teams work. Also, consider limiting employee access to different systems.

Install antivirus software

This should be used on all business computers and updated regularly. Ensure that your operating systems, web browsers, and other applications are always up to date.

Require multifactor authentication

Multifactor authentication requires users to verify their identity beyond a username and password. Verification may include requiring a PIN, a physical token, a phone, a fingerprint, or facial recognition and will add a layer of security to your systems. Many software vendors offer this feature.

Back up data

Along with updating software and apps, back up all your data across devices. Data may include documents, spreadsheets, financial files, human resources information, and accounts payable and receivable files. Set your systems to back up information automatically — at least weekly— and store backups off-site. 

CO— aims to bring you inspiration from leading respected experts. However, before making any business decision, you should consult a professional who can advise you based on your individual situation.

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