If you are a small or medium-sized business (SMB) and still surviving the wrath of the ongoing pandemic, then pat your back, and take a bow. Not many have survived, but you did. You already are a winner!
These unprecedented times have tested the mettle of all business sizes around the globe. But this cannot hold truer than for the small and medium-sized businesses. We say so because when it comes to the Asia-Pacific region, SMBs hold a market share of more than 90% (in some countries this goes up to 98%) of businesses and employ a whopping 50% (the number goes above 90% in some Asian countries) of the total workforce.
SMBs in the APAC region contribute nearly 17% to the national GDP. However, this number shoots up three times in the higher income countries like Malaysia and Singapore, where their contribution is nearly half of the country’s annual GDP (40 to 50%).
The number mentioned above has taken a beating since the beginning of the pandemic though. As per Facebook’s ongoing research collaboration with the Organization for Economic Co-operation and Development (OECD) and the World Bank, 1 in 4 (24%) Global SMBs have reported closures by February 2021 and an astonishing 55% decline in sales.
These numbers, however, increased while speaking about the condition of businesses in the APAC region. The report stated that 61% of small-medium businesses reported a drop in sales volumes and an overall 45% of the workforce faced the axe due to the COVID-19 pandemic. This trimming of the workforce and the need to paddle harder through troubled waters of the pandemic has led to an increase in the adoption of digital tools in SMBs.
However, this embrace of digitization has aroused the interest of major cybercriminals groups who until now were only interested in the big-ticket names. A 2021 Data Breach Investigations Report shows that 46% of all cyberattacks targeted globally were aimed at SMBs. This means the number has exactly doubled in a year where it was hovering around the 28% mark previously. The reason? Mass digitization wave owing to the pandemic.
Since the onset of the pandemic, stringent lockdowns were imposed around the globe. This made the situation precarious for SMBs as they struggled with multiple challenges such as disruptions in logistics, restrictions on labor mobility, overall declines in demand or market orders, and a subsequent drying up of cashflow. The challenges are uneven across the industries. For example, export firms suffered more than others, due to a decline in external demand and a lack of key raw material supplies, whereas those in the manufacturing sector reported more problems with supply chain disruptions.
However, in the face of adversity, SMBs found an ally that would help them get through this torrid time and not only help them recover but also leapfrog competitors who are digital laggards. Yes, we are talking about the ally named “Digitization” – the use of digital technologies and digitized data to impact how work gets done, transform how customers and companies engage and interact, and create new (digital) revenue streams.
According to the “2020 Asia Pacific SMB Digital Maturity Study”, based on a survey conducted by the International Data Corporation, 94% of SMBs in APAC say they have become more reliant on technology to ensure business continuity during the pandemic, while nearly 70% say they are accelerating the digitization of their businesses to cope with the situation.
Digitalization cannot happen without digitization – the conversion of business processes and data from analog to digital.
Evidently, SMBs have started using or have increased their usage of digital tools at some point in the customer lifecycle, since the onset of the pandemic. The biggest advantage of the digital medium is that it helps them immensely to reach their customers directly. It seems easy, gives great ROI but like all services, it comes with its own set of challenges, and cybersecurity is one of them.
The digital risk faced by SMBs is immense and can be categorized into two broad areas – the lack of cybersecurity awareness and the shortage of cybersecurity resources. This has resulted in the inability to recognize cyber risk and thus unable to plan and implement mitigation strategies. The basic understanding of attack surfaces can be sorely lacking when business owners are uninformed of how cybercriminals could compromise a network and steal data. Every system or application that is somehow connected to the Internet can turn into entry points for hackers with malicious intent. By rapidly moving their processes into digital formats and connecting to third-party systems, SMBs would have added many potential attack surfaces overnight. Furthermore, not fully understanding how the software supply chain works, SMBs can be easy targets for enterprising cybercriminals.
In many instances, SMBs would not even be aware that they have been compromised, that data related to their businesses, partners, and customers would be floating in dark web marketplaces and sold over and over again. Not knowing they have been breached, these business owners would not be able to take action to strengthen their defense.
Without adequate IT and security resources, SMBs would be exposed to vulnerabilities which they would be unable to mitigate. These could come in the form of expired certificates, weaknesses in their operating systems and applications, unpatched software, and more.
SMBs could also be in the dark should hackers impersonate their domains, companies, websites, social media profiles. These are all signs of phishing attacks and scams in the making.
The threats associated with SMBs are growing by the day. The lack of basic cyber hygiene can hinder SMBs’ growth and threaten their long-term business viability.
And before the problem escalates, we would recommend SMB owners onboard a technology partner that can help them gauge their digital exposure so they would have a pulse on their digital risk profile and can start to take actions to close cybersecurity gaps.
One such technology partner would be CYFIRMA’s DeTECT.
DeTCT helps businesses remove the blind spots in their cyber risk profile and arms them with critical information of data leaks, breaches, and impersonation related to the business. Equipped with this knowledge, business owners can implement the right solutions confidently and accelerate their business growth.
For more information on CYFIRMA’s DeTCT, click here.