Most Small Businesses Don’t Recover From Cybercrime

In light of the growing number of high-profile cyber-attacks hitting tech and financial institutions across the country, the U.S. House Small Business Subcommittee on Health and Technology held a hearing Thursday on the topic of “Protecting Small Businesses Against Emerging and Complex Cyber-Attacks.”

A recent study cited by the subcommittee chairman Rep. Chris Collins, (R-NY), found that though more than three-quarters of small businesses believe their companies are safe from hackers, 20% of all cyber-attacks hit small businesses with 250 or fewer employees. And while major corporations like Facebook and many big banks seem to easily bounce back from their reported tech infiltrations, according to the same study, nearly 60% of small businesses will shutter within half a year after being victimized by cybercrime.

Dan Shapero, a CompTIA member and the founder of IT company ClikCloud, was one of the professionals testifying at the hearing. Shapero said that the average cost of a data breach is $6.75 million total and $214 per compromised customer record, which could potentially send a small business into bankruptcy.

Jobs and revenue losses are not the only effects of these attacks. In Collins’ opening statement, he cited a report by the Office of National Counter Intelligence Executive, which found that billions of dollars of trade secrets, intellectual property and technology are being stolen each year by countries such as China and Russia.

To protect small business from cyber-crime, the expert panel suggested data breach notification reform; there are currently 47 different data breach laws across the country, said Shapero, which place an “unnecessary burden” on small businesses.

Shapero also suggested more workforce development and a greater value placed on IT certifications, as more IT professionals could help protect businesses from attacks.