How a Phishing Attack Affects a Business

Phishing—which involves hackers accessing sensitive data using malicious links sent by a seemingly legitimate email address—is the most common type of cyberattack affecting businesses today.

To protect your business from this cybersecurity threat, it's important to understand its impact so you can incorporate these strategies into a comprehensive cybersecurity plan.

How phishing can disrupt business

A phishing attack can be financially and emotionally devastating for your business, particularly in four key areas.

Financial losses

The average cost of a data breach in 2023 was $4.45 million, a 15% increase over the past 3 years. This includes the costs of fending off an attack, recovering from an attack, experiencing depreciating stock value and incurring regulatory fines associated with the incident if regulators discover that your business didn't have the proper security mechanisms in place.

Reputational risks

Customers are significantly more likely to do business with brands they trust. The ability to safeguard consumer data has become crucial to establishing and maintaining this trust, so when a data breach occurs—whether it's due to phishing or another type of cyberattack—it undermines consumers' belief in your brand.

Loss of proprietary data

Hackers commit cybercrimes because data is valuable. In fact, cybercrimes are expected to cost $8 trillion globally in 2023. If cybercriminals access your proprietary company information—which can include trade secrets, information on upcoming product launches or new partnerships and acquisitions—it can affect your competitive advantage.

Disrupted business operations

When a breach occurs, especially in the days immediately following a cyberattack, your business may be unable to operate properly. This can have a snowball effect on other parts of your business, such as processing orders, communicating with customers in a timely manner or procuring the necessary materials to keep your product or service available in the market.

How to spot phishing scams

Knowledge is the first line of defense to protect yourself and your company from phishing attacks. This means understanding how to identify one—and knowing what to do when you suspect something is off.

• Check the domain: Before checking a message, look at the sender's email address to verify that it's a familiar domain.
• Be wary of impersonal greetings: Even with today's automated messaging, most legitimate interactions can still personalize communication. Generic greetings may be a red flag, especially if the recipient is requesting action on your part.
• Question the urgency: If an email pressures you to act right away, it's likely not from a legitimate sender.
• Verify links and attachments: Hover your mouse over any links to note their location, and only open attachments from trusted senders.

Tips to avoid phishing scams

Although phishing attacks have become more common and clever, you can take several steps to prevent or reduce the likelihood of these incidents.

Conduct ongoing employee training

Ongoing employee training is one of the best defenses against phishing attacks. This includes training employees to recognize suspicious emails, text messages and phone calls, as well as making your cybersecurity plan available to all team members.

Be proactive about security

You can put mechanisms in place to strengthen email security, including requiring two-factor authentication so employees must enter their password and then a code or PIN to gain access to company systems. Also have them use password security best practices like changing passwords frequently, and consider third-party monitoring to help isolate potential threats before they infiltrate your systems.

The bottom line

Phishing attacks are a reality for businesses today, but it doesn't mean you can't take meaningful action. Taking these steps to prevent attacks can reduce your risks and potentially prevent your business from experiencing the harmful impact of a phishing attack.