Small businesses play an important role in the chain of economic relationships involving public and private companies. Bigger and more established corporations have seen fit to outsource key components of their operations to smaller and more nimble businesses to increase operational efficiencies. As players in a vast commercial market, small companies have to follow the same guidelines as the big players when it comes to critical aspects such as information security.
Before electronic storage became the industry standard, security shredding of records containing classified information was sufficient to minimize the risk of information falling in the wrong hands. Mobile communication and wireless technology are game changers because they complicated the task of securing data exchanged and stored electronically.
Why Small Businesses Should Care About Data Security
As a crucial cog in the economic machinery, small businesses need to pay close attention to securing information, especially high-value data that may impact competitive edge and reduce profitability. Businesses that depend on each other to fulfill certain parts of their operations will have to share confidential information. Big corporations, because of the extent of their exposure and liability, are at the forefront of efforts to improve security protocols through advanced encryption software and use of holographic passcodes, to mention a few proactive measures.
However, some small businesses have taken a more casual approach to data security, believing that they are too small to be targets of hackers and fraudsters. This is not a constructive attitude for small businesses who are partnering with the big boys, no matter how small their roles are in the flow chart.
In a world that runs on information, data protection is as much an operational strategy as it is a fiduciary obligation. Once a business becomes privy to information shared by another in the course of their dealings, it is understood, if not mandated, that both entities observe confidentiality of information. This includes any type of unauthorized disclosure and preventing access by any parties not authorized to do so.
Hackers have realized that a convenient back door to a company’s secure operations reside in third party links. These links may include suppliers, outsourced contractors and other service providers. Hackers have targeted small businesses in increasing numbers to access information related to their big clients. Failure to implement effective security protocols are exploited by savvy cyber crooks to gain information that can be turned into profits.
Consequences of a Security Breach
Failure to implement data security measures will compromise information and business relationships. Consequences may include termination of lucrative contracts, loss of potential business due to credibility issues and public relations headaches. A data breach can also lead to lawsuits by affected parties, investigations by government agencies and substantial fines.
For small companies who partner with big business clients, a security breach will have far-reaching effects that may affect their viability and business reputation.
In a competitive environment, access to high-value data can mean getting an edge on the competition. For this reason, hackers are constantly trying to exploit security loopholes to give themselves a backdoor access to a treasure trove of confidential data.
Information Security for Small Businesses
The first line of defense for small businesses would be adequate password protection for data-rich files. New applications have made it possible to use biometric devices including fingerprint scanners and retina readers. Touch screen interfaces allow for picture passwords requiring pre-set gestures to unlock a file or application software.
Internet-based transactions necessitate several levels of security. A system of verification should be in place so that only qualified transactions are fulfilled. Cloud computing has expanded the possibilities for web-based operations, but it has also added another area of vulnerability that can be mitigated with the use of
Additionally, small businesses need to establish a secure workflow so that only authorized personnel can have access to sensitive information. Encryption should be used for digital data exchanges.
The other side of the data security equation is proper disposal of unnecessary files. Best practices call for on-site security shredding of hard copies, DVDs, flash drives and other storage devices containing restricted information. Where on-site shredding is not feasible, radio-tagging files slated for destruction will add some measure of security to the process.
Information Security is a Mandate
When it comes to data security, small businesses need to do their part to make sure that sensitive data collected from customers and clients are managed properly to prevent a security breach. Malicious intrusion into secure files will compromise the information, expose clients to fraud and affect operations and profitability.