SMBs Underestimate Cybercrime Threat

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Cyber SecuritySmall businesses are unprepared for cybercrime and hacking attacks and are being targeted by criminals because of the poor state of their online security. A new study carried out by Cyber Streetwise and KPMG reveals that less than a quarter of small businesses see cybercrime as a threat despite the impact of a cyber breach on the long term brand reputation, customer retention and the ability to win new business. The report states: “Cyber crime undermines confidence in our communications technology and online economy. There were an estimated 5.1m incidents of fraud and 2.5m incidents falling under the Computer Misuse Act recorded last year (ONS, 2015). Add in recent high profile hacking cases and the issue of cyber security is now more important than ever.”

Key findings:

  • Cyber security was cited as one of the top concerns by less than a quarter of small businesses (23%), yet it is fast becoming the only way to do business:
    • 83% of consumers surveyed are concerned about which businesses have access to their data and 58% said that a breach would discourage them from using a business in the future.
    • Recently published KPMG Supply Chain research supports this2; 94% of procurement managers say that cyber security standards are important when awarding a project to an SME supplier and 86% would consider removing a supplier from their roster due to a breach.
  • UK small businesses value their reputation as one of their key assets. Yet they are hugely underestimating the likelihood of a cyber breach happening to them and its long term impact:
    • 60% of small businesses surveyed have experienced a cyber breach, but only 29% of those who haven’t experienced a breach cited potential reputational damage as an ‘important’ consideration.
  • The impact of a cyber breach can be huge and long lasting. 89% of the small businesses surveyed who have experienced a breach said it impacted on their reputation.  Those who experienced a breach said the attack led to:
    • Brand damage (31%)
    • Loss of clients (30%)
    • Ability to win new business (29%)
  • Quality of service is also a risk. Those surveyed who experienced a cyber breach found it caused customer delays (26%) and impacted the business’ ability to operate (93%).

Unsurprisingly some of the statistics above are deeply worrying.

More than 80 per cent of consumers express concern about their data yet less than 25 per cent of businesses see cybercrime as a threat. In view of the almost weekly – and reported – hacks recently highlighted in the media last year I would say this is a serious head in sand situation that has to be remedied. If small businesses adopt an “everything in the garden is rosy” attitude then the drive for better security has to come from consumers. Quite how this would happen I am unsure but will be giving some thought to it. Watch this space.

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