Data Security and Privacy: Risks Business Owners Can’t Afford to Ignore

Cyber security used to feel like a problem for large organisations with complex systems. Today, it’s just as relevant — if not more so — for small and medium-sized businesses.

Cyber incidents are becoming more frequent, more targeted, and more convincing. A single breach can disrupt operations, expose sensitive information, and damage trust with customers and suppliers. And in many cases, the entry point is surprisingly ordinary: a reused password, an outdated device, or an email that looks just legitimate enough.

Rather than reacting after something goes wrong, it’s worth understanding where the most common risks sit — and how to manage them sensibly.

The Risks to Watch Most Closely

Email-based scams and phishingPhishing remains one of the most common causes of data breaches. The difference now is sophistication. AI is being used to create emails that closely mimic real suppliers, clients, or internal staff — including invoices, payment requests, and login prompts.Regular staff training, clear internal payment processes, and occasional scam-simulation exercises can significantly reduce risk.

Ransomware and malwareOutdated software, unsupported devices, and unsecured Wi-Fi networks are easy access points for attackers. Automatic updates should be turned on wherever possible, with a simple monthly check for anything requiring manual attention. Devices that no longer receive security updates should be replaced, even if they still “work”.

Password practicesWeak or reused passwords are still one of the easiest ways for attackers to gain access. Multi-factor authentication should be standard, particularly for email, banking, payroll, and cloud systems. Long, unique passwords may be inconvenient — but inconvenience is often what keeps systems secure.

Third-party tools and platformsPayroll systems, scheduling tools, CRMs, marketing platforms, and cloud storage all hold valuable data. While these tools can improve efficiency, they also expand your risk footprint. Choosing reputable providers with clear security standards — and limiting access to only those who need it — matters.

AI and data privacyAI tools can be powerful productivity aids, but they also raise real privacy questions. Public AI platforms should not be used to process sensitive information such as customer data, financial details, or intellectual property unless you fully understand how that data is stored and reused.

Why Professional Support Matters

Cyber security isn’t a “set and forget” task — and it’s rarely realistic for business owners to stay across every technical detail themselves.

Working with the right professionals helps ensure your systems, processes, and controls evolve as your business grows. Even if you don’t need constant oversight, putting an annual security and privacy review in place can help identify gaps early, confirm responsibilities, and reduce the risk of costly surprises.

This is particularly important where financial systems, payroll, customer data, and operational processes overlap — areas where security issues often have wider business consequences.

What Happens If You Have a Data Breach in New Zealand?

Under the Privacy Act 2020, New Zealand businesses have specific obligations if a privacy breach occurs.

If a breach causes — or is likely to cause — serious harm to individuals, you must:

• Notify the Office of the Privacy Commissioner, and

• Inform the affected individuals as soon as practicable

  
  

A privacy breach can include unauthorised access, loss of information, or accidental disclosure. Failing to notify when required can result in regulatory consequences, in addition to reputational damage.

In addition, businesses can report cyber incidents to the National Cyber Security Centre (NCSC), New Zealand’s lead government agency for cyber security. The NCSC provides trusted guidance, monitors threat trends, and uses incident reports to improve national cyber resilience. Reporting incidents is not just about compliance — it helps authorities identify emerging threats and issue timely advice to protect others.

Planning for When Systems Aren’t Available

One often-overlooked aspect of incident planning is recognising that, during a ransomware or system lockout event, digital access may be limited or unavailable.

Consider having a paper copy or a back up of your privacy breach protocol. Being clear in advance about decision-making authority, external contacts, and response steps helps businesses act quickly and calmly, even under pressure.

Having this thinking done ahead of time can significantly reduce disruption and confusion when it matters most.

A Practical Way to Think About Data Security

Good data security isn’t about perfection or paranoia. It’s about reasonable, well-maintained systems that support how your business actually operates.

Small, consistent actions — reviewed regularly — are far more effective than one-off fixes made in response to a crisis.

For business owners, this is also an opportunity to step back and consider how operational efficiency, system design, and risk management fit together. Security issues rarely exist in isolation; they often expose weaknesses elsewhere in the business.

Working alongside advisers who understand both the commercial and operational implications can help ensure these conversations are proactive, not reactive — and aligned with the business you’re building.

Disclaimer:The information provided in this article is general in nature and does not constitute personalised advice. You should consult with your Cyber Security Sepcialist before making decisions based on this content.