May 1, 2023 | Zenagos Expert Tips

Zenagos Expert Finance Tip: Confirm Wire Transfers Live

Q. Dear Zenagos,
I run a small business, and I keep getting pitched by cybersecurity companies. Does a small business really need to worry about cybersecurity?
–Coral

Our post about protecting your small business from theft generated quite a bit of conversation. Several people shared their stories about their experiences with embezzlement (at companies both large and small and at all kinds of organizations, including nonprofits), and we received related questions about how to protect your business.

Every business that engages with the internet needs to think about cybersecurity. The Federal Communications Commission – which regulates communications by radio, television, wire, satellite, and cable across the U.S. – comments, “Theft of digital information has become the most commonly reported fraud, surpassing physical theft” (FCC, 2023). Cybersecurity scams become more sophisticated over time.

Website Attacks
Small businesses actually make fairly juicy targets for hackers, since they have what hackers want (mailing lists and customer information), and they both cannot afford complex cybersecurity solutions and have limited time to deal with the issue themselves (SBA, 2013). A common form of cyberattack that affects small business is the DNS (Denial of Service) attack, in which a hacker overwhelms a website with traffic until it crashes. If you do not host your own site, your web host may require that you pay for software to prevent or mitigate this kind of attack.

Phishing Attacks
The most dangerous form of cyberattack for small business occurs when one of the employees of the business is fooled into letting a hacker into the company’s system. Once they are in the system, hackers will look for ways to obtain financial passwords or to access wire transfers. The Zenagos Experts are personally aware of multiple cases in which overseas cybercriminals sat dormant in the email systems of universities and private companies for months, waiting for dialogue about an upcoming wire transfer. When the two parties to the wire transfer send emails back and forth about the details, the cybercriminal inserts an email that looks like it is from the receiving party, causing the sending party to accidentally wire the money to the wrong account. The receiving account is generally in another country, from which it cannot be retrieved in time. If you ever send money by wire transfer, it is crucial that you obtain the account information live, ideally face-to-face, so you can ensure that you are getting the information from the correct person. Never conduct a wire transfer entirely over email.

Make a Cybersecurity Plan
Whether to pay a firm for services is up to you, but there are economical ways that you can educate yourself and make a plan for your business before you hire a vendor. The FCC publishes a Cybersecurity Tip Sheet, which is a good place to start and includes links to useful resources, such as the GCA Cybersecurity Toolkit. On the same website, the FCC provides a Cyberplanner, which enables a small business owner to create a custom cybersecurity planning guide. In addition, the U.S. Small Business Administration provides resources to help you strengthen cybersecurity for your small business.

Entrepreneurs have a lot on their plates, and dealing with cyberplanning may seem like too much for you to handle. However, if you consider the consequences of having your website crash, losing your customers’ data, or losing your (or a client’s) money, the time and energy required may seem more manageable. Try to do just one thing each month to improve your cybersecurity posture. Over time, these small steps can make a big difference to your business.

Related Blog Posts
How can I keep my employees from stealing from me?
Is it a good idea to self-finance my business?
I sell specialized tools. Is my company valuable?

References

Federal Communications Commission. (n.d.). Cybersecurity for small businesses. Retrieved on April 29, 2023, from https://www.fcc.gov/communications-business-opportunities/cybersecurity-small-businesses

U.S. Small Business Administration. (n.d.). Strengthen your cybersecurity: Cyberattacks are a concern for small businesses. Learn about cybersecurity threats and how to protect yourself. Retrieved on April 29, 2023, from https://www.sba.gov/business-guide/manage-your-business/strengthen-your-cybersecurity

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