Cyber crime is one of the key issues facing franchisees and franchisors in Australia, but fortunately there are some steps your business can take to help mitigate some of the risks.
In the 2022-23 financial year, the Australian Signals Directorate received one cyber crime report every six minutes, with an average cost of $71,600 for small to medium sized businesses.
NAB Group Economics research shows around three in 10 Australian SMEs have experienced a cyber attack or data breach during the life of their business. Malware, ransomware, phishing, and business email compromise, including invoice scams, were the most common forms of attacks on SMEs.
While most of the headlines are dominated by large data breaches involving household names, the impacts of cyber crime can be felt all over the business community, with franchise systems facing a unique cyber threat.
Cyber criminals targeting franchisees, or a franchisor, pose a significant cost and reputational risk, with the potential to disrupt an entire brand due to shared systems and processes.
It’s important that franchisors have safeguards in place to protect the brand, with many investing in robust systems and processes and ongoing training and education. Franchise agreements and manuals should have a clear outline of cyber security controls, responsibilities between the franchisee and franchisor, contingency plans and identify who is liable for any financial repercussions of cyber security breaches.
Education key to prevention
While the threat to SMEs remains high, NAB’s research found that SMEs are one of the least cyber-prepared sectors. Only 15 per cent of businesses conduct extensive training around scams and cyber security risks, while four in 10 had “not much training at all”.
To support businesses in strengthening their cyber security, NAB has developed a suite of free training and materials to help small businesses protect themselves.
These include educational materials for employees such as regular webinars, videos and how-to guides available via the NAB Business Security Hub, as well as a free Microsoft Cyber Security Assessment tool and CrowdStrike software offer for NAB small business customers, which can be found here.
How franchisees and franchisors can safeguard their businesses
Take these four essential steps to take to protect your business:
1. Implement the Australian Cyber Security Centre (ACSC) Essential Eight. Developed by the Australian Signals Directorate, these principles provide baseline cyber security mitigation strategies.
These are: application control, patch applications, patch operating systems, restrict Microsoft Office macro settings, user application hardening, restrict administrative privileges, patch operating systems, multi-factor authentication and regular backups.
2. Turn on automatic updates. Using out of date software, antivirus, or operating systems can leave your computer or phone vulnerable to cyber attacks.
3. Teach your team to spot red flags. Educate your employees to identify suspicious emails, texts or phone calls and other scams that could compromise security.
4. Stay up to date on the latest cyber threats. Visit nab.com.au/security for the latest insights.
In addition to the above, business owners can visit the Australian Cyber Security Centre and Australian government’s ACCC Scamwatch.
While the threat of cyber crime has not abated, continuous education, backed up with robust systems and processes can make a difference to keeping your business safe.
Author: Despina Kathestides is head of franchise banking at NAB.
