Cybersecurity threats have evolved into a major source of financial risk for businesses of all sizes. IBM revealed that in 2024, the average cost of a data breach reached a record high - almost 5 million USD, a 10% increase over 2023.
From data breaches and ransomware attacks to phishing scams and insider threats, cybercriminals are constantly devising new ways to exploit vulnerabilities. And with a fast-evolving cyber landscape, financial risk is ever-increasing and harder to track.
In this instance, proactive financial risk management becomes essential. In this blog article, we cover the following:
- Types of cybersecurity threats to look out for
- How cyber attacks put your business at risk
- The key to proactive financial risk management
Types of cyber security threats to look out for
1. Ransomware
Ransomware in your system encrypts critical data, with responsible parties then demanding a ransom for its release. This leads to crippling financial losses - not to mention weeks of lost productivity.
Currently, ransomware attacks are one of the biggest emerging threats. From 2023 to 2024, there was an alarming 81% increase in these attacks, upping financial risk significantly going into 2025.
2. Phishing and social engineering
Phishing and social engineering attacks aim to deceive employees. They trick them into revealing sensitive information like login credentials and financial data. This can lead to fraudulent transactions, account takeovers, and devastating data breaches.
As a rule, organisations should aim to hold regular training sessions on how to spot phishing emails. This will significantly reduce financial risk.
3. Account takeover fraud
According to a recent study in which 500 UK SMBs were surveyed, 30% of businesses were affected by account takeover fraud.
Account takeovers may occur when companies fail to conduct adequate Know-Your-Customer or KYC checks. What looks like a merger or partnership may open a backdoor for criminals to create fraudulent accounts using stolen identities.
Company Watch offers a comprehensive solution for businesses seeking to conduct thorough KYC checks during onboarding processes. By providing detailed company reports, director information, tax filings, and other vital financial and legal data, Company Watch provides a holistic report that can empower businesses to make informed decisions and mitigate financial risk.
4. Data breaches
A data breach consists of any kind of unauthorised access to sensitive data. This may include customer information, financial records, or intellectual property.
The financial risk associated with data breaches is high. Not only do they lead to big fines and legal costs, they can also cause significant reputational damage.
How cyber attacks put your business at risk
Direct financial losses
Cyber attacks can result in substantial financial losses for businesses. The global cost of cybercrime is expected to surge dramatically, escalating from $9.22 trillion in 2024 to a staggering $13.82 trillion by 2028.
These losses can stem from various sources:
- Direct theft of funds or valuable data
- Ransom payments to regain access to systems or prevent data leaks
- Costs associated with system recovery and security upgrades
- Lost revenue due to business interruption
- Legal fees and potential fines for data breaches
Operational disruption
Cyber attacks can severely disrupt business operations, leading to:
- System downtime, preventing normal business functions
- Inability to access critical data or IT infrastructure
- Disruption of payment systems or other essential services
- Loss of productivity during recovery periods
Reputational damage
A cyber attack can harm a company's reputation in many ways:
- Loss of customer trust due to data breaches
- Negative publicity and media coverage
- Potential loss of business and market share
Data compromise
Businesses face risks related to data security:
- Theft of sensitive customer information
- Loss of intellectual property or trade secrets
- Compliance issues with data protection regulations
Supply chain vulnerabilities
The interconnected nature of modern business creates additional risks:
- Attacks on third-party IT service providers can impact multiple businesses simultaneously
- Vulnerabilities in the supply chain can be exploited to target specific companies
Long-term consequences
Beyond immediate impacts, cyber attacks can have lasting effects:
- Loss of competitive advantage
- Increased cybersecurity costs, potentially leading to higher prices for consumers
- Ongoing legal and regulatory challenges
The key to proactive financial risk management
Financial risk management is all about taking proactive steps to ensure that your business is never in a position of insecurity. Company Watch provides tools that assess and predict different types of financial risk. This allows businesses to allocate resources effectively, including investments in cybersecurity measures.
Company Watch also offers detailed risk scores and insights into business relationships. This allows you to identify vulnerable partners or suppliers that could potentially cause account takeover fraud.
Our dedicated fraud detection tool, Vigilance™, provides real-time insights into company information, director details, and financial filings. By analysing vast amounts of data, Vigilance™ helps you uncover hidden risks before you are able to manually pick up on them, giving you a proactive edge against business fraud.
Key takeaways
- Types of cybersecurity threats include ransomware, phishing, account takeover fraud, and data breaches.
- Cyber attacks can put your business at risk through crippling financial losses, operational damage, supply chain issues, data compromise, and reputational damage.
- Financial risk management is all about being proactive to prevent business insecurity.
