Top Cybersecurity Exploits MSMEs Should Be Aware Of!

In today's digital age, cybercrime is on the rise, and no business is immune to the threat. Small and medium-sized enterprises (MSMEs) are particularly vulnerable to cyberattacks due to their lack of resources and understanding of the severity of an attack. MSMEs are often used as bridges to larger targets, as demonstrated by the Target breach. There are four major types of cybersecurity exploits commonly used by fraudsters, namely identity fraud, subscription fraud, business email compromise (BEC), and ransomware. MSMEs need to take proactive measures to prevent and prepare for cyberattacks, such as having proper policies in place before launching services, to mitigate the risks associated with cybercrime.

Companies today are becoming prime targets for cybercrime as more companies shift from physical mediums to digital platforms. If left unchecked, these cybersecurity exploits can ruin any digital business’s operations and cause irrecoverable damage.cybersecurityCybercriminals are relentless — targeting all forms of digital businesses, from big corporations to MSMEs (Micro, Small and Medium Enterprises). However, MSMEs in particular are higher-valued targets and more vulnerable to cyberattacks according to Forbes. There are several reasons for this:

Small Businesses Lack the Resources or Priority for Cybersecurity

Many MSMEs are not concerned with cybersecurity due to the belief that they are “too small” to warrant any kind of targeted cyber attack. More often than not, they do not completely understand the severity of an attack until it actually happens.

This general lack of concern leads to severe neglect of cybersecurity measures — effectively rendering them easy targets for cybercriminals.

In contrast to larger firms, MSMEs simply do not have the resources to develop their cybersecurity systems which leave many systems outdated and ineffective in responding to an ever-evolving threat.

MSMEs Serve as Bridges to Larger Targets

More often than not, MSMEs are not the intended target for fraudsters, but rather the large companies they serve instead. In 2013, fraudsters managed to steal more than 40 million debit and credit card accounts from shoppers that visited Target. They managed to achieve this operation virtually undetected by infiltrating a smaller firm that had access to Target’s point-of-sales structure.

This strategy is as old as time — with natural predators stalking lone targets which will lead them to large herds of prey.

A surprising number of MSMEs continue to have a poor understanding of cybercrime and cybersecurity as a whole. The lack of willingness to adapt to technological change or just the general absence of concern is a major issue. Therefore, companies need to begin active efforts in preventing and preparing for such an eventuality.

Types of Cybersecurity Exploits

Awareness and knowledge are key first steps in protecting yourself against cybercrime. Here, we discuss the four major types of exploits commonly used by fraudsters.

1. Most Dangerous! – Identity Fraud

Identity fraud serves as the bedrock to other forms of fraud, forming the logistics that run the entire criminal organisation.


Through identity fraud, fraudsters can set up mule accounts and use them as platforms to facilitate money laundering, money transfers, and other kinds of illicit activity. Even after an attack has been alerted, fraudsters can walk away scot-free as their true identities are hidden behind fake or stolen identities.

How does it work? Fraudsters use false or forged identification documents to bypass ID check systems, allowing them to perform activities without restriction, such as setting up multiple accounts, performing transactions, or gathering more intelligence. This step is crucial in facilitating business identity fraud, where criminals impersonate owners, managers, or employees to conduct payment requests, gain deeper permission access, or steal sensitive information.

Identity fraud is also one of the most costly forms of fraud, causing financial damage, disrupting operations, and causing public relations and brand-related challenges for the brand. Many cybersecurity exploits also rely on identity fraud to perform other operations, such as injecting ransomware, facilitating money laundering, and more.

Many MSMEs are also not equipped with the right tools to combat the threat of identity fraud within their businesses, often receiving accounts openings with missing or suspicious information.

2. Subscription Fraudcybersecurity

Operators estimate that almost 40% of all bad debts are caused by incidents of subscription fraud globally. This exploit occurs when fraudsters obtain the necessary documents usually required during the signup process for contracts or services. However, they have no intention of paying for the products and services used. This exploit is commonly found in Buy-Now Pay-Later (BNPL) operations, as well as services with sign-up benefits.

Each individual case of subscription fraud represents financial losses for the company, and prolonged exposure can lead to increased complaints, a pool of lower-quality customers, and reduced investor confidence.

Today, there is a low barrier of entry to creating accounts and entering a subscription agreement. Fraudsters can manipulate the customer sign-up process by generating “fake” IDs, which can be obtained through synthetic generation, illegitimate means or stolen from existing customers.

After gaining access to a business’s products/services, they will simply not pay back the due amount owed. Tracking down fraudsters using a false ID can prove to be a challenging feat as well. Such cases are more prevalent thanks to the rise in disposable e-mail services and random ID generators available for free online.

Subscription fraud has the potential to be an even larger threat — leading to Revenue Share Fraud, Bypass Fraud, and others. This is especially hard to tackle when the subscription service involves multiple parties, such as in the case of international telecommunication fraud where it involves multiple mobile operators and complex mobile network systems.

MSMEs often have to rely on subscription benefits to gain market share, but such a tactic can backfire. It is important to have proper policies in place before having such services go live.

3. Business Email Compromise (BEC)


BEC is a subsection of identity fraud, but warrants a section on its own. Through basic Google searches, scammers can identify top-level figures within an organisation, and spoof their emails to resemble the genuine email address. They then trick targets into revealing confidential corporate information or extorting money.

BEC scams are becoming increasingly widespread due to increased remote work as a result of the COVID-19 pandemic, where internal communications are largely conducted online.

How BEC scams work:

  • Scammers will first study their targets to fake their identities. Sometimes they will create fake but authentic-looking websites. Other times, they will register companies with the same name but located in a different country.
  • Even a simple e-mail CC request can allow fraudster access to internal communications, allowing them to monitor emails to identify transactions. They will also review conversational patterns and invoices.
  • In the middle of an email conversation, scammers will impersonate either party by spoofing their email domain.

BEC attacks can be especially detrimental to a digital business because fraudsters can gain access to a business’s digital network and the confidential information contained within it. A report published by the FBI in 2020 revealed that they received 19,369 BEC-related complaints that amounted to a total loss of approximately US$1.8 billion.

A subsidiary of Toyota lost US$37 million in 2019 when they fell victim to BEC attacks, according to CPO magazine. Cybercriminals tricked and manipulated an executive in the company’s financial department to make an unsanctioned wire transfer.

To prevent this, MSMEs need to implement proper information security management system policies, and ideally, obtain the relevant certifications. For those with less resources, even regular penetration testing exercises would suffice — such as management teams purposely using fake emails to gauge employee awareness.

4. Man-in-The-Middle Attacks (MiTM)


MiTM attacks occur when a fraudster intercepts and relays messages sent between two parties who believe they are in direct communication with each other. This allows the fraudster to effectively eavesdrop on conversations and even take control of them at any point. Individuals can be manipulated into divulging confidential information.

MiTM attacks are more technical in nature compared to other forms of fraud. To insert themselves in the middle of online communications, fraudsters distribute malware systems through various channels, such as phishing links, e-mail attachments, and more.

Once the malware has been distributed, attackers will gain easy access to a user’s web browser, as well as data sent and received during transactions. Online banking and e-commerce sites are prime targets of MiTM attacks.

In 2015, Lenovo computers were shipped out containing pre-installed adware that rendered users vulnerable to MiTM attacks. According to TechRepublic, the software in question was known as Superfish Visual Search, and it installed fake certificates that allowed attackers to eavesdrop and intercept secure incoming traffic.

For MSMEs, it is then important to ensure that all related devices within the company have the latest updates installed. Even the default anti-virus system baked into your device’s operating system is enough to deter most threats, but more advanced solutions may be required for more data-sensitive industries.


How Innov8tif Can Help

Innov8tif seeks to help you prevent identity fraud and other kinds of cybersecurity exploits from threatening your business. As an ISO 27001:2013 certified artificial intelligence company, we have had extensive experience in helping businesses in mitigating digital fraud amongst a wide range of other solutions.

Our patented EMAS eKYC and Customer ID Assurance (CIDA) systems are holistically developed to provide an integrated and extensive cybersecurity framework to protect both the interests of your business and your customers. Innov8tif’s products make extensive use of artificial intelligence to analyse and verify the identity of individuals, much like the facial verification feature found in most modern smartphones.

This entire process is done within a single overarching framework to ensure that individuals are legitimate. The stringent measures provided by our solutions effectively block out potential bad actors and thus, reduces the main risk of identity fraud and other exploits that seek to threaten your business.

We have a proven track record with clientele in over 10 ASEAN countries. Built on years of strong relationships, Innov8tif’s customer base comprises a diverse range of industries that includes telecommunication companies, investment firms, and government agencies among others.

To learn more about our solutions, download our product brochure! We can also be reached at