Why Phishing Attacks Such a Huge Risk for Your Business

As one of the biggest cybersecurity considerations the modern business has to make, how to combat phishing attacks has to be at the top of any business’ cybersecurity strategy. The effects of phishing attacks on a business can be far-reaching and long-lasting. Phishing attacks

Let’s take a look at phishing and why it’s such a big problem for today’s business.

Why are Phishing Attacks Such a Huge Risk for Your Business

The effects of phishing attacks on a business can be far-reaching and long-lasting. One of the most significant impacts of phishing attacks is data breach. When a data breach happens through a phishing attack, it can cause severe business disruption and you must remain at your vigilant best to secure your business from a phishing attack.

Some other ways in which phishing attacks can impact your business are by damaging your reputation, loss of money and customer data, identity theft, loss of financial information, loss of company value, and intellectual property, and disruption of other operational activities. Put together, all these effects can create irreplaceable repercussions.

While any security threat can hurt a business, a phishing attack is of grave consequence because of its nature types. So, before we get to the deeper end of why phishing attacks are so serious for businesses, let’s learn about the common types of phishing attacks. It will give you a better understanding of how to avoid them and take corrective measures.

What is a phishing attack?

A phishing attack is a cyber-criminal activity that is aimed at getting sensitive business information like logins, certifications, and other important business data. Gordon Lawson, a member of the Forbes Council describes a phishing attack as a combination of two major components. He says, “A successful phishing campaign originates from two key factors: people and process. When a threat actor is able to successfully manipulate a user to engage with malicious content while simultaneously running the tactical details of the campaign and infiltrating the system, traditional security defenses are evaded.”

A phishing attack can come in the shape of phishing emails, phishing websites, phishing messages or instant messages. When users open any of this malicious content, they can fall prey to phishing attacks.

Some of the most common signs of such attacks include dangers or urgency from the sender, a message style or tone that is unusual or out of context, making peculiar requests to complete tasks that are totally unrelated to you, having strange web addresses and demands of payments or to disclose personal information or sensitive data. These are definite red flags and users must avoid clicking on emails that have these characteristics.

A successful phishing attack forces or lures users to click on the messages sent and divulge in providing sensitive information. Once the malicious links are clicked, the attackers gain access to your systems and get what they want.

Types of phishing attacks

Phishing attacks are a deceptive way of getting access to sensitive information without the user knowing it. Phishing attacks can also come in the form of a request to install malware, phishing scam or ransomware. Phishing attacks must be taken seriously because they can come in different avatars like Spear Phishing, email phishing, CEO Fraud, Whaling, etc. Here are some common types of phishing attacks.

Email phishing

This is the most common type of phishing attack. In this scenario, suspected phishing emails are sent to the users in the garb of an authentic organization. Such phishing emails get scammers access to a huge number of users registered on a website. That’s why phishing emails are often sent to a mass of users for en masse data breaches.

Clone phishing

Clone phishing is all about attackers cloning an actual email that a user might have received. By cloning the original email, the scammers replace attachments or links with malicious ones and once the user clicks on them, they become the target.

Phishing emails that come through clone phishing have a sense of urgency. They will often request you take immediate action to make use of an existing offer or threaten the closure of your account if you don’t change the username or password, resulting in a data breach These are quite tempting and users often fall prey to them.

Domain spoofing

This is the third kind of email phishing and it comes in the form of domain spoofing. In this form of a phishing attack, scammers spook an established organization’s domain name, making it look like you have received an authentic email.

The scammers can only mimic the organization’s address and the email would contain a unique email address. These phishing attacks can also create a fraudulent website that looks very close to the real one. The original website designs are replicated, and even though the domain is similar, they are not identical.

Spear phishing

Spear phishing is a form of phishing attack where phishers target a specific group of users rather than attack generic ones. Spear phishing, a form of social engineering, works because they are so personalized, making the users think that they are genuine.

These phishing emails are personalized using the recipient’s name, phone number, company, or other similar information. Such personalizations make them more believable. Since such phishing attacks require acquiring precise data and personal information, Spear phishing usually happens on various social media sites like LinkedIn. These can also be seen as a form of social engineering attack.

Whaling

This kind of phishing attack is another form of spear phishing that targets wealthy and high-profile individuals like CEOs. Targeting such high-profile people is not easy and so scammers use techniques like sending phishing emails about filing tax returns, upgrading login credentials for login, etc. Such phishing emails also contain personalized information about the recipient, making them more believable.

A successful whaling attack usually is the first step towards Advanced Persistent Threats (APT), resulting in CEO Fraud. Spear phishing must be taken very seriously as it can cause severe business disruption.

CEO Fraud

In this form of phishing attack, scammers impersonate a CEO by using information through compromised emails sent during whaling. Through this, scammers can do third-party transfers or file fake IT returns on behalf of the organization.

Such phishing emails target the lower-level employees of the organization, who spring to action seeing an email from their CEO, falling easy prey to the phishing attack. These are extremely sophisticated forms of social engineering and are believed to cost billions of dollars to companies in the US alone, causing business disruption across industries.

Evil Twin

Can there be something more dangerous than a malicious Wifi network? Frequented by several users to access free wifi, such hotspots are ver targets for a cyber attack. As users connect to this fake wifi, the scammers steal the usernames and passwords of their social media and bank accounts.

The phishers can gain access to a host of information while the users browse or surf on the compromised wifi networks.

Effects of phishing attacks on Business

Phishing attacks can be a nightmare for businesses amounting to a loss of sensitive information, financial information, customer data, identity theft, trade secrets, data loss, and even access to bank details. It can result in direct monetary losses as well.

Let’s look at the impact of phishing attacks on businesses in detail.

Reputational damage

Once the news of a data breach comes out, the reputation of a company takes a major hit. Several headlines like “British Airways data breach: Russian hackers sell 245,000 credit card details” and “EasyJet admits data of nine million hacked” were widely distributed and consumed across the internet.

The reputational damage caused by such headlines can take years to be forgotten from popular memory, amounting to incremental loss to the companies.

Customer loss

If you thought that reputational loss was a huge adversary, it is only the beginning. Incidences of data breaches make customers quite nervous, especially if it’s a bank. Data from a recent report revealed that 44% of users of a UK-based firm stopped doing business with them for months after the news of the data breach broke. 41% of consumers said that they will never want to do business with the company again.

This kind of loss of customers can make it really difficult for businesses to win back and the trust is lost. Winning that trust back is a huge uphill task.

Loss of company value

Apart from impacting customer confidence, data breaches also affect investors’ confidence. Data shows that every data breach results in a fall of 7.27% of fall in a company’s share value. When Facebook’s user data was leaked in 2018, it lost close to $36 billion. Similarly, the British Airways data breach saw a 4% drop in its share in the same year.

Financial Penalties

Data breaches or mishandling of consumer data attract several regulatory and financial penalties as well. In 2020, the British Airways data breach also attracted a fine of 20 million UK pounds by the IOC following the 2018 data breach where the data of more than 400,000 consumers was compromised.

Similar to the British Airways data breach, a phishing incident with Marriott Hotels attracted heavy fines. They had to shell out 18.4 million UK pounds post the 2014 data breach.

Business disruption

Every data breach amounts to business disruption, irrespective of its scale. Phishing attacks paralyze businesses as staff is unable to work post a data breach and there is no data available. Even consumers find it difficult to interact with businesses in such a scenario.

Even though businesses are able to bounce back within 24 hours, any loss of time and productivity can have a long-lasting impact on the commercials.

How to prevent a phishing attack

Now that we know how a phishing attack can cause severe damage to a business, let’s get to know how you can prevent such incidents from happening. Here are the best ways of doing so:

Understand how a phishing scam looks like

Being vigilant and aware of the latest phishing scams is the best way of safeguarding yourself from a phishing incident. There are websites that list the latest phishing attack trends. Keep an eye on them.

Don’t click on anything, well, fishy

One of the most common ways of falling prey to a phishing attack is by clicking on a malicious link. It is better to visit the website directly rather than clicking on an unknown link, no matter how irresistible it looks.

Anti-phishing add-on to the rescue

Most web browsers provide free anti-phishing add-ons that alert you of a malicious link or a phishing attack. Install these to be safe.

Don’t share sensitive information on unknown site

Be careful of which site you feed your sensitive information on. Any website without “http” or a padlock icon should be avoided. The same goes for websites without security certificates.

Change your passwords regularly

You might not even know if the login credentials of your online bank account or social media accounts have been compromised and scammers will continue to have unlimited access to it. Changing your password regularly is a good habit to inculcate.

Be alert to be safe

Some of the other things you can do to be safe are installing firewalls, not clicking on any pop-ups, regularly updating your browsers, not giving information on a website unless absolutely necessary, and having a Data Security Platform to spot signs of a phishing attack.

Why Phishing Attacks are Such a Threat to Businesses

Phishing scams are more common than you think. In many cases, businesses don’t even realize that they have been scammed, which is the worst case possible.

You’ve Probably Been Phished

When trying to explain what phishing scams are to someone who has no idea about it, we typically start with the namesake. Phishing is the same as fishing. A hacker will bait a hook and users will bite on it. It’s that simple. Instead of worms or minnows, a cyber attack like a phishing attempt needs some bait that will fool an unsuspecting computer user into providing sensitive information that will allow a hacker to access secured networks and steal or corrupt data.

To say that this method is effective would be an understatement. First of all, the massive breadth of attacks—there are literally millions of these attacks per day—results in high levels (and low percentages) of successful attacks. In fact, 88% of organizations that were polled claimed to experience at least one phishing attack in 2019. In 2020, phishing emails were one of every 4,200 emails sent or about 73 million. The pace has actually quickened in 2021.

Successful phishing attacks result in:

• Stolen credentials
• Compromised networks
• Installing malware
• Loss of sensitive information
• Creation of a fake login page
• Loss of financial information
• Compromised credentials
• Loss of consumer confidence as well as investor confidence
• Compromised company’s reputation
• Increased fraudulent activity

Phishing is More Prevalent Than Ever

Phishing has been an issue for quite a while, but the COVID-19 pandemic and the corresponding jump in remote work provided the perfect opportunity for these scammers to operate. In 2020, 75% of worldwide organizations were targeted by cyber attacks, while 74% of US businesses fell prey to cyber attacks in some way. Increased use of social media has also made users easy prey to cyber criminals.

This often led to massive losses, some $3.92 million on average. That’s an average and takes into account loss of productivity from downtime, data breach, deterioration of consumer confidence, and other factors.

It is therefore important that you do what you can to train your staff about how to recognize and thwart phishing attempts before they have a chance to have a negative effect on your business.

Point North Networks, Inc., can help you put together a training strategy, as well as put together tools to help you keep your network and data safe. Call us at 651-234-0895 to learn more.

Frequently Asked Questions About Phishing Attacks

What are some of the most common ways a phishing attack happen?

A phishing attack is a form of cyber-attacks where scammers target users through phishing emails or unsolicited emails, instant messaging, clicking on links to malicious websites, sending malicious emails that look like a legitimate email, voice phishing, phishing messages, targeting social media pages of users, etc.

What are the main aims of phishing attacks?

Scammers aim at unprepared users for various reasons. These include gaining privileged access to sensitive information, financial information, important company information, user credentials, data breach, installing malware and ransomware, and a lot more.

How phishing impacts a company?

A phishing attack and cause a loss of company value, investor confidence and consumer confidence, the company’s reputation, etc. Such attacks can also result in the loss of money. Business disruption is the most common impact a business faces. Data breaches through phishing attacks can result in a substantial decrease in productivity.

Conclusion

Phishing attacks are a real threat to businesses, especially in today’s digital world where more and more information is being shared online. The need to be vigilant and alert has never been more than what it is now. Unless you act smart and understand phishing, you are most likely to fall prey to phishers. Alternately, take professional help from experienced service providers like Point North Networks and stay safe at all times.