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Small businesses need to be wary of cyber crime to avoid losing crucial profits in the current economic climate, SME advocates have warned.
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SMEs urged to remain vigilant against cyber crime
02 October 2024
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13 minute read
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Small businesses have been warned of the risk that cyber crime and scams present to their operations by the Commonwealth Bank of Australia (CBA) and the Council of Small Business Organisations Australia (COSBOA).
According to CBA, nearly 90 per cent of all scams reported to the bank this year had come from small businesses, with more than half of their losses going to investment scams.
CBA said the data analysed the number and types of scams reported by SMEs during the year and revealed investment scams, phishing and business email compromise continued to be the most common SME scams.
CBA executive general manager small business banking, Rebecca Warren, said small businesses remain a prime target for scams that can severely impact their viability.
“If a business owner or leader falls victim to an investment scam, it’s not just the business that could be compromised, but also the jobs of the people who work there,” Warren said.
“We can see through our data that small businesses lose around $30,000 on average to investment scams, which can have a devastating impact, both financially and emotionally.”
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CBA said SMEs must know what to look out for, which includes being suspicious of investment opportunities that sound “too good to be true.”
The bank also noted a refined focus on early detection and prevention of scams through fraud prevention and monitoring activity, industry-leading features and education.
Warren said CBA would aid in any way possible, however, SME owners must learn to be aware of potential cyber crime.
“We know running a small business is tough and our priority is to help protect our customers from scams,” she said.
“While the bank’s technology is designed to help detect and prevent fraudulent activities, it is crucial for customers to take proactive steps to protect themselves. It is imperative that they know what to look out for.”
CBA has recommended that SME owners be aware of investment opportunities that may present themselves via social media or email.
They must also train and educate staff efficiently, establish the correct security protections and take advantage of technology.
October marks cyber security awareness month which has been endorsed and supported by COSBOA.
The small business advocate announced its active involvement in the ‘Stop the Hack’ campaign designed to facilitate scam education in October.
COSBOA said it encourages small businesses across Australia to bolster their cyber security practices and enrol in the free ‘Cyber Wardens’ training program.
“The Stop the Hack campaign is a key initiative within the broader framework of the National Cyber Strategy led by both industry and government, to raise awareness about cyber threats and provide businesses with practical solutions,” COSBOA said.
COSBOA CEO Luke Achterstraat said this awareness month is a reminder for small businesses to stay vigilant and secure online.
“Cyber crime is escalating and small businesses are particularly vulnerable,” Achterstraat said.
“This month is an opportunity for businesses to learn how to safeguard their digital operations and take proactive steps to protect themselves.”
The cyber wardens program has been developed specifically for SMEs and provides essential training to help them implement better security measures.
COSBOA said cyber crime continues to pose serious risks to small businesses in Australia, with $46,000 being the average financial loss per attack.
The small business advocate also noted businesses can experience “significant downtime”, losing up to 25 hours of operational time in the aftermath of a cyber attack.
Achterstraat said 95 per cent of breaches are caused by human error which adds to the cruciality behind cyber education.
“Cyber crime is not just a financial issue for small businesses, it’s a threat to their reputation, their customer base and their future growth,” he said.
“The cyber wardens program is designed to be an accessible and effective way for small businesses to protect themselves and thrive in a secure digital environment.”
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