Three Cybersecurity Mistakes Small Businesses Make: A Data Privacy Attorney's Perspective

In today's digital landscape, where data and technology are integral to business, companies of all sizes are prime targets for cyberattacks.

As privacy and data security attorneys, we see the severe impact of inadequate cybersecurity and data privacy measures.

This article highlights three common areas of risk and provides practical, proactive steps businesses can take to minimize these risks.

1. Failing to Minimize Data Collection

"When you invent the ship, you also invent the shipwreck . . . ." – Paul Virilio.

Similarly, when a company collects data, it inevitably opens itself up to the risk of a data breach. Cybersecurity is the new, ever-evolving arms race. As new safeguards are created, bad actors are working to get around them. The question is not if but when a company will face a data security incident.

The Risk:

Many companies collect data they don’t need, often due to outdated processes or future marketing hopes. However, this unnecessary data increases business risk. A larger data footprint presents a bigger target for cybercriminals and amplifies the impact of a data breach.   

Proactive Risk Mitigation:

• Engage with all departments to determine what data is necessary for the business groups to operate.
• Stop collecting unnecessary data.
• Delete outdated or unneeded data.
• Anonymize or pseudonymize data that does not require identifying individuals.
• Implement policies to ensure only essential data is collected, stored, and used.

Though reducing data collection may disrupt operations initially, it significantly lowers the risk of breaches and their consequences.

2. Inadequate Employee Training (and Retraining)

Employees can be a company's greatest asset or its weakest link when it comes to cybersecurity. Without proper ongoing training, employees may inadvertently cause significant damage. 

The Risk:

Untrained employees may fall prey to phishing attacks, use weak passwords, or mishandle sensitive data, exposing the company to breaches. Various data protection laws, such as GDPR or CCPA, also require businesses to ensure employee training and compliance.

Proactive Risk Mitigation:

Develop and implement a comprehensive, ongoing training program that covers:

• Compliance with relevant data privacy laws (e.g., HIPAA, GDPR, GLBA, CCPA, etc.)
• Recognizing and reporting cyber threats like phishing scams or malware.
• Best practices for securing devices and data.
• Implementing software updates and patches.
• Regular software updates, use of VPNs, and mobile device management.
• Proper data handling and breach reporting protocols.

The above list is not exhaustive and will vary from company to company and industry to industry.

Training should be continuous and evolve with new threats, helping minimize cybersecurity risks and ensuring compliance with legal obligations.

3. Reactive Cybersecurity Measures

Many companies underestimate the importance of robust technical, administrative, and physical safeguards and only invest in cybersecurity after an incident, which is too late.

The Risk:

"This is how we have always done it" are the eight most dangerous words in an ever-evolving cybersecurity environment. Stagnant cybersecurity practices leave companies vulnerable. Without regular updates, security measures can become outdated, increasing the chances of a breach.

Proactive Risk Mitigation:

• Review and update cybersecurity safeguards and policies annually.
• Use robust encryption and up-to-date security measures.
• Allocate resources for ongoing cybersecurity improvements.
• Hire privacy professionals or external consultants to identify gaps and recommend improvements.
• Ensure legal compliance in agreements with customers and service providers.
• Limit employee access to only the data and systems necessary for their roles and review these permissions regularly

Proactive investment in cybersecurity safeguards is far cheaper than the cost of a data breach.

Conclusion: A Proactive Approach to Cybersecurity

Cybersecurity is not optional. The costs of a data breach far outweigh the costs of prevention, and non-compliance with evolving data privacy regulations increases legal and financial risks. Customers also expect strong data protection, and a breach can severely damage a company's reputation.

Remember, cybersecurity is not a one-time fix but an ongoing process. Regularly assess your security posture, stay informed about emerging threats, and be prepared to adapt your strategies as the threat landscape evolves.

By minimizing unnecessary data collection, training employees, and proactively improving cybersecurity measures, businesses can reduce their risk.

In today's interconnected world, cybersecurity is not just an IT issue—it's a business imperative. Taking these steps protects your company and can even become a competitive advantage, showcasing your commitment to data security in a security-conscious market.

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© 2024 Ward and Smith, P.A. For further information regarding the issues described above, please contact Mayukh Sircar, CIPP/US.

This article is not intended to give, and should not be relied upon for, legal advice in any particular circumstance or fact situation. No action should be taken in reliance upon the information contained in this article without obtaining the advice of an attorney.

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