Business Email Compromise (BEC): Why It’s Still a Threat to SMBs

Business Email Compromise (BEC): Why It's Still the #1 Cyber Threat to SMBs in 2025

Perhaps unsurprisingly, Business Email Compromise (BEC) remains one of the most effective and costly cyber threats organisations face. Even with strong spam filters and multi-factor authentication (MFA), attackers continue to find ways to trick users into sending money or sensitive data.

The truth is simple: as long as email remains the backbone of business communication, BEC will persist. That's why modern Zero Trust security strategies focus on layered defences that combine identity protection, advanced email security, and user awareness training. This way, communication stays seamless for users whilst becoming nearly impossible for attackers to exploit.

The Problem with Email Security

Did you know email has been around since the 1970s? It was designed for convenience, not security. Over time, it became the universal tool for business communication - and unfortunately, the easiest entry point for attackers.

Unlike other cyberattacks that exploit technical vulnerabilities, BEC exploits human trust rather than technical flaws. Attackers impersonate executives, vendors, or partners to trick employees into transferring funds or revealing confidential information. This social engineering approach makes BEC particularly dangerous because traditional security measures like firewalls and antivirus software can't stop an attack that appears to come from a legitimate source.

Small and medium-sized businesses are especially vulnerable because they often lack dedicated security teams and training programs. Cybercriminals know this, which is why SMBs have become prime targets for BEC schemes.

Common Types of Business Email Compromise Attacks

Understanding how these attacks work is your first line of defence. Here are the most common BEC attack patterns:

Executive Impersonation (CEO Fraud). Fraudsters pose as CEOs or CFOs requesting urgent wire transfers. These emails often create a sense of urgency with phrases like "I need this done before close of business today" or "This is a confidential acquisition deal." Attackers may spend weeks researching the company's hierarchy and communication patterns to make their impersonation convincing.

Vendor Email Compromise. Attackers compromise supplier accounts and send fake invoices with altered banking details. Since the email comes from a known, trusted source, accounts payable teams often process these payments without additional verification. In some cases, attackers simply create look-alike domains (like "companyname.net" instead of "companyname.com") that appear legitimate at first glance.

Payroll Diversion. Cybercriminals impersonate employees and contact HR or payroll departments requesting changes to direct deposit details. These attacks often occur around holiday periods when HR departments are busiest and may not follow standard verification procedures as carefully. The employee typically doesn't discover the fraud until their next paycheque fails to arrive.

Account Takeover: When attackers successfully compromise an employee's email account through phishing or credential stuffing, they gain access to legitimate business communications and contact lists. This insider position allows them to launch highly targeted internal scams that are extremely difficult to detect.

In a Zero Trust environment, where every request must be verified and validated, traditional email security simply doesn't meet the standard. That's why a comprehensive, layered defence strategy is essential.

Building a Layered Defence Against BEC

Protecting against BEC requires more than just technology—it's a combination of smarter tools, stronger policies, and ongoing user education. Instead of relying solely on filters or passwords, organisations must verify identity through multiple layers of defence.

Identity Protection

Multi-factor authentication and conditional access policies dramatically reduce the risk of account takeover by requiring multiple forms of verification before granting access to sensitive systems. This single step blocks the vast majority of unauthorised access attempts.

Advanced Email Security

Modern AI-driven email security solutions go beyond traditional spam filters. They analyse sender behaviour, detect impersonation attempts, identify anomalies in email patterns, and flag suspicious requests before they reach users' inboxes. Tools like Microsoft Defender for Office 365 use machine learning to detect phishing and flag suspicious sender domains automatically.

User Awareness Training

Regular security awareness training helps employees become your strongest defence. When staff members can recognise social engineering tactics, spot phishing attempts, and know when to verify unusual requests through secondary channels, your organisation becomes much harder to compromise. Training should be ongoing, with regular phishing simulations and refresher courses.

Verification Policies

Implement clear protocols requiring verbal confirmation or approval through secondary communication channels for financial transactions, banking detail changes, or sensitive information requests. This simple step stops many BEC attacks in their tracks.

Incident Response

Having a rapid detection and containment plan in place minimises both financial losses and reputational damage when attacks occur. This includes knowing who to contact, how to freeze transactions, and when to involve law enforcement.

Why SMBs Should Adopt Zero Trust Security

A true Zero Trust strategy goes beyond email filtering. It fundamentally changes how your organisation approaches security by eliminating the concept of implicit trust. No more blind trust—instead, every request is verified, every identity is validated, and every transaction is monitored.

Zero Trust operates on three core principles: verify explicitly using all available data points, use least privilege access to limit user rights to only what's necessary, and assume breach by continuously monitoring for threats. When you implement these principles, you create a layered defence where attackers can't exploit trust relationships, and your business can operate with confidence.

Leveraging Microsoft's Security Ecosystem

If you already use Microsoft's ecosystem, you have powerful tools at your disposal. Microsoft Defender for Office 365 detects phishing and impersonation attempts using machine learning, whilst Microsoft Entra ID with Conditional Access ensures that only trusted users and devices can access sensitive accounts, automatically blocking risky sign-ins.

These tools work together to create an adaptive security layer that adjusts protection levels based on risk, making it much harder for attackers to gain initial access even if they obtain valid credentials.

The Real Impact of BEC on Small Businesses

The consequences of falling victim to a BEC attack extend far beyond immediate financial loss. Average losses often range from tens of thousands to hundreds of thousands of pounds, which can be catastrophic for smaller organisations. Beyond the money, businesses face reputational damage, regulatory consequences, operational disruption, and potential legal complications.

The good news? These impacts are largely preventable with the right security investments and practices. The cost of implementing proper BEC defences is typically a fraction of the potential losses from even a single successful attack.

Key Takeaway

Business Email Compromise thrives because it targets people, not systems. Unlike malware that exploits technical vulnerabilities, BEC attacks exploit human psychology and trust. That's why the most effective defence combines technology, policy, and human awareness.

By implementing Zero Trust principles, deploying advanced email security solutions, and investing in ongoing user awareness training, SMBs can finally turn the tide against the #1 cyber threat they face today. The question isn't whether your organisation will be targeted—it's whether you'll be prepared when those attacks come.

Partner with Dolphin IT Solutions

At Dolphin IT Solutions, we specialize in helping small and medium-sized businesses stay ahead of evolving cyber threats like Business Email Compromise. We understand the unique challenges SMBs face—limited budgets, small IT teams, and the need to balance security with productivity.

That's why we've developed tailored security solutions designed specifically for organizations like yours. Our comprehensive approach includes:

• Advanced Email Security Solutions: We implement and manage enterprise-grade email protection tailored to your specific environment and risk profile, including Microsoft Defender for Office 365 and other leading security platforms.
• Identity and Access Management: Our team configures multi-factor authentication, conditional access policies, and identity protection measures that balance security with user experience.
• Ongoing Security Awareness Training: We deliver engaging, practical training programs that empower your employees to become your strongest line of defence against social engineering attacks.
• 24/7 Monitoring and Threat Detection: Our security operations centre watches for suspicious activity, anomalous behaviours, and emerging threats around the clock.
• Rapid Incident Response: In the event of a security incident, our expert team provides immediate containment, investigation, and recovery services to minimize damage and restore normal operations quickly.
• Compliance and Risk Management: Our solutions help you meet regulatory requirements and industry standards while reducing your overall cybersecurity risk.

Don't wait until your business becomes the next victim of a costly BEC attack. The threats are real, but so are the solutions. Contact us to schedule a complimentary security assessment and learn how we can give you the peace of mind you deserve.