How confident are you that your organization could recover quickly if an attacker gained unauthorized access?

Would a single click be enough to risk sensitive data, customer trust, or your brand's reputation?

Phishing is one of the most common cyberattacks affecting businesses, often designed to steal critical data or implant malicious software.

But just how much damage can a phishing attack cause? And what specific risks does your company face?

How Can Phishing Attacks Harm Company Networks?

Phishing attacks are a significant threat to company networks, often exploiting human error to infiltrate secure systems.

But how can these attacks really harm a company?

Below, we’ll explore several key areas of vulnerability, looking at both the immediate damage and long-term impacts on operations, finances, and reputation. 

1. Financial Losses and Costly Recovery

When a phishing attack is successful, companies often face substantial financial repercussions.

On average, a data breach costs about $4.88 million, covering the expenses for identifying and removing the threat, restoring compromised data, and implementing stronger cybersecurity measures to prevent future incidents. 

Additionally, companies may incur penalties if they fail to comply with data protection regulations, including substantial fines.

For example, British Airways was fined $20 million after a breach exposed the information of 400,000 customers. 

Smaller companies that may lack resources for swift recovery feel these financial strains even more deeply.

2. Productivity Losses and Operational Disruptions

A phishing attack disrupts day-to-day business operations. Imagine the productivity impact when employees must take time away from their duties to address a phishing incident or when essential systems are shut down due to malware introduced through a phishing email.

According to studies, nearly 74% of businesses experience productivity loss following a phishing incident, as malware often forces systems offline, halting operations until the threat is fully removed. 

These interruptions can cost businesses thousands of dollars daily, further impacting revenue and client service continuity.

3. Erosion of Customer Trust and Brand Reputation

Phishing attacks don’t just affect internal operations; they can also lead to lasting reputational damage.

When customer data is compromised, trust in the company weakens, and this loss of trust can impact future business.

For instance, a survey found that 60% of respondents are less likely to work with a retailer or brand that has suffered a data breach. Additionally, 59% of consumers say they will avoid companies hit by a cyberattack in the past year. 

For brands that have spent years building customer relationships, losing consumer confidence can be incredibly challenging to rebuild, impacting both revenue and market position.

4. Increased Exposure to Future Cyber Threats

A successful phishing attack signals to cybercriminals that the company may be an easy target.

After an initial breach, attackers might attempt more sophisticated attacks, knowing the company’s network is vulnerable.

This leads to a cycle of heightened risk, where repeated phishing attacks become increasingly damaging. Additionally, data stolen in the first attack may be used to bypass security checks in future attacks, creating an even larger threat to the company’s network integrity.

5. Financial Penalties

In addition to the direct costs of remediating a phishing attack, your company may face financial penalties.

Regulations like GDPR and HIPAA require businesses to safeguard customer and patient data.

You could be fined if a phishing attack exposes this sensitive information. You may also need to cover credit monitoring costs and identity theft protection for affected customers. These expenses can quickly add up, putting a substantial dent in your bottom line.

What Are the Most Common Types of Phishing Attacks Targeting Businesses?

Phishing attacks come in various forms, each uniquely designed to exploit vulnerabilities in business systems.

Here are some of the most common types:

1. Email Phishing

This is the most prevalent form of phishing, where attackers send fraudulent emails posing as legitimate entities, like banks or colleagues, urging recipients to click on malicious links or share sensitive information.

Research indicates that phishing attacks are prevalent, with estimates suggesting that about 1% of all emails sent are phishing attempts.

What’s scarier is nearly 47% of payloadless phishing emails (which do not contain malicious links or attachments but rely on manipulation) can bypass popular, secure email gateways.

2. Spear Phishing

Unlike general phishing, spear phishing is highly targeted. Attackers research specific individuals within a company (often with access to sensitive data) and craft personalized emails to increase the chances of success. 

These attacks are particularly harmful because they are challenging to detect and often aimed at high-level executives or finance departments​.

3. Whaling (CEO Fraud)

Whaling is a specialized form of spear phishing targeting upper management, such as CEOs or CFOs, where attackers use detailed personal and corporate information. 

The goal is often to authorize large financial transfers. For example, these attacks often take advantage of the “urgency” factor, tricking executives into transferring funds to fraudulent accounts​.

4. Smishing (SMS Phishing)

In smishing, attackers use SMS messages instead of emails to deliver malicious links or requests for sensitive data. These messages often appear as alerts from reputable institutions urging immediate action. 

Smishing increasingly affects businesses as employees use mobile devices to manage work communications.

5. Vishing (Voice Phishing)

Vishing involves phone calls where attackers impersonate credible organizations, often requesting sensitive information over the phone. 

This tactic commonly targets employees with access to sensitive data or financial systems by creating a sense of urgency or panic during the call​.

6. Business Email Compromise (BEC)

Business Email Compromise (BEC) attacks rely on compromised business email accounts. 

Attackers may infiltrate legitimate accounts and pose as colleagues or executives to request funds transfers or access sensitive data. 

BEC incidents are among the costliest, causing billions of dollars in losses worldwide due to successful account takeovers.

How Much Do Phishing Attacks Cost Companies?

The financial impact of phishing attacks on businesses can be staggering. According to recent studies, the average cost of a phishing attack for businesses with fewer than 500 employees is $2.98 million. 

But it's not just direct financial losses that hurt companies. Employee productivity takes a significant hit due to phishing attacks.

Research shows that productivity losses increased from $1.8 million in 2015 to $3.2 million in 2021. Imagine the cumulative impact of employees being unable to work while systems are down or spending valuable time changing compromised passwords and monitoring their accounts.

One of the most insidious types of phishing, business email compromise (BEC), is also among the most expensive. In 2022 alone, BEC attacks cost companies $2.7 billion. These scams impersonate executives or trusted business partners to trick employees into wiring money or sharing sensitive data, and they're only becoming more sophisticated.

The bottom line? Phishing is a costly threat no company can afford to ignore. Investing in robust email security, employee training, and incident response planning can help you avoid becoming another statistic in the ever-growing toll of phishing attacks.

How Can Businesses Protect Against Phishing Attacks?

To protect against phishing attacks, businesses can adopt a multi-layered cybersecurity strategy focusing on technological solutions and employee awareness.

Here are some essential steps to help safeguard your business:

1. Employee Training and Awareness

Since phishing attacks often exploit human error, regular training is crucial. Educate employees on recognizing phishing attempts, such as emails with urgent language, unfamiliar sender addresses, or suspicious links.

Frequent simulated phishing exercises can improve detection skills as employees learn to spot red flags in a safe environment​.

2. Email Filtering and Spam Detection

Implementing robust email filters can prevent many phishing emails from reaching employee inboxes. These filters can identify suspicious attachments, flag known malicious senders, and detect common phishing tactics, such as fake domain names.

Many email security platforms now use AI to improve the detection of phishing attempts in real-time​.

3. Two-Factor Authentication (2FA)

Adding 2FA or Multi-Factor Authentication (MFA) significantly reduces the risk of unauthorized access, even if an attacker obtains login credentials.

MFA requires users to provide a secondary verification, such as a code sent to their mobile device, making it harder for attackers to access accounts with stolen credentials​.

4. Implement Anti-Phishing Software and Endpoint Security

Anti-phishing and endpoint security solutions can help monitor and block access to malicious websites and detect phishing attempts. These tools protect devices from phishing-related malware that may slip through other defenses. 

Endpoint security is especially important for businesses with remote workers who may be more vulnerable to phishing attempts​.

5. Use Domain-Based Message Authentication (DMARC)

DMARC helps prevent phishing emails that appear to come from your domain, protecting both your employees and your customers.

By configuring DMARC policies, businesses can instruct email providers to block or quarantine suspicious messages that claim to be from the company’s domain but aren’t​.

6. Develop an Incident Response Plan

A response plan ensures your team can act quickly if a phishing attack succeeds. This plan should outline immediate actions, such as containing the threat, notifying stakeholders, and documenting the incident. 

A quick response helps mitigate damages, reduce downtime, and prevent further attacks​.

7. Limit Access to Sensitive Information

Limit employees' access to sensitive data and critical systems based on their roles, ensuring that only authorized individuals can reach crucial areas. This way, if an employee’s account is compromised, the attacker’s access will be limited to less sensitive parts of the network​.

How Outsourcing Cybersecurity Helps Prevent Phishing Attacks

Outsourcing cybersecurity can be a powerful strategy for businesses aiming to prevent phishing attacks, as it brings specialized expertise, advanced threat detection tools, and scalable solutions that may be otherwise difficult to maintain in-house. 

Here are several ways outsourcing cybersecurity can help prevent phishing attacks:

• Expertise and Experience: Reputable outsourcing companies employ professionals with extensive knowledge and experience in identifying and mitigating phishing threats. These experts stay updated on attackers' latest tactics, ensuring that your organization is equipped with the most effective defense strategies.
• Advanced Threat Detection Tools: Outsourced providers utilize tools and technologies to detect phishing attempts in real-time. By monitoring email traffic and analyzing patterns, they can identify suspicious activities before they reach employees, significantly reducing the risk of successful attacks.
• Employee Training and Awareness Programs: A critical component of preventing phishing attacks is educating employees about the risks and signs of phishing attempts. Outsourcing companies often provide comprehensive training programs that teach staff how to recognize suspicious emails and respond appropriately, fostering a culture of security awareness.
• Incident Response Planning: In the event of a phishing attack, having a well-defined incident response plan is essential. Outsourced cybersecurity teams can develop and implement these plans, ensuring your organization can quickly respond to threats, minimize damage, and recover efficiently.
• Continuous Monitoring and Support: Cybersecurity is not a one-time effort; it requires ongoing vigilance. By outsourcing your cybersecurity needs, you gain access to continuous monitoring services that can detect potential vulnerabilities and threats around the clock. This proactive approach helps ensure your defenses remain strong against emerging phishing tactics.

By leveraging the expertise and resources of global staffing providers, businesses can significantly enhance their defenses against phishing attacks, protecting sensitive information and maintaining trust with customers and stakeholders.

What Steps Should Businesses Take if They Fall Victim to a Phishing Attack?

If your business falls victim to a phishing attack, taking swift, structured action can help mitigate the damage and reduce further risk. 

Here are the key steps:

1. Contain the Threat

Immediately isolate affected accounts, systems, or networks to prevent the phishing attack from spreading. 

For example, instruct employees to disconnect from the network if they suspect their device is compromised. Locking down affected email accounts and resetting passwords can also help limit unauthorized access to other network parts.​

2. Assess the Damage

Conduct an initial investigation to determine the scope of the attack. Identify which systems or data may have been compromised and determine whether any sensitive information, such as customer data or financial records, was accessed or stolen. 

This assessment is crucial for informing you of your next steps and addressing potential system vulnerabilities.​

3. Notify Key Stakeholders and Regulatory Bodies

Depending on the data impacted, you may need to inform customers, partners, and employees whose data could be affected. Additionally, most data privacy regulations require businesses to report breaches involving personal data within a specific timeframe. 

This transparency can help mitigate reputational damage.​

4. Implement Remediation Measures

Work with IT or cybersecurity experts to remove any phishing-related malware or malicious software from affected systems.

Use forensic analysis to uncover any additional backdoors or vulnerabilities the attacker may have created, and enhance email filtering and spam detection settings to prevent further attacks.

If the attack exploits an employee’s credentials, reset those credentials and require multi-factor authentication (MFA) across all accounts.​

5. Enhance Employee Training and Awareness

After a phishing attack, reinforce security training with all employees, especially those affected.

Provide additional guidance on recognizing phishing tactics and encourage reporting of suspicious emails. Phishing simulations can help improve employee vigilance and prevent future incidents.​

6. Review and Update Security Policies

After the incident, assess your security policies and update them as necessary. Consider implementing more robust cybersecurity practices, like endpoint protection, ongoing threat monitoring, and incident response planning.

Engaging a cybersecurity partner for regular audits and assessments can further bolster your defenses.

Remember, phishing attacks can happen to any organization, no matter how prepared. A well-rehearsed incident response plan and a trusted cybersecurity partner can help you weather the storm and emerge stronger.

By taking proactive steps to prevent phishing and responding decisively when attacks occur, you can protect your company's network, data, and reputation from the costly consequences of a breach.

Phishing attacks can significantly harm a company's network, but you can reduce the risk with the right strategies.

Outsourcing to NeoWork can help fortify your business against digital threats by enhancing operational resilience and securely managing IT projects.

While NeoWork’s services aren’t cybersecurity-specific, our expertise in technical assistance means we can support your broader security needs.

Connect with NeoWork for a free consultation and explore tailored solutions to maximize your business potential.