Procurement · 9 February 2016

Reputational risk of cyber crime ignored by small firms despite huge potential damage

Reputational risk of cyber crime
Some three quarters of small businesses have suffered security breaches

The owners of small UK firms are severely underestimating the reputational risk of cyber crime, according to new research by KPMG and the government’s Cyber Streetwise campaigning body.

Fewer than one third of those small business owners who have not experienced cyber crime themselves believe that the damage such a security breach would cause is an important reputational consideration.

But some 83 per cent of the consumers surveyed are concerned about businesses’ access to their data – while over half indicated that a cyber security breach would prevent them from using a company again.

And the vast majority of those small business owners whose firms have suffered a security breach believe it damaged their reputation – with a third saying it took them more than six months to get back on track following the attack.

Danny Lawrence, the National Police Chiefs’ Council PROTECT co-ordinator for cyber crime, said: “A cyber attack may prove so serious that it impairs an organisation’s ability to operate and even function longer term. Doing nothing can no longer be an option – small business leaders place their reputation and existence on the line if they fail to take action.

“I would encourage all SME owners to consider their cyber security, seek out support from resources available (such as Cyber Streetwise and the Cyber Essentials scheme) and consider making this piece of work a critical part of their business strategies in 2016.”

Additional research published in 2015 by PwC revealed that three quarters of small businesses had suffered security breaches, up from 60 per cent a year ago – with costs to firms affected as high as £311,000.

Sandra Dexter, vice-chairman of the Federation of Small Businesses, said: “All small firms should now be aware of the risks, and take steps to protect themselves against the escalating level of cyber crime.

“Cyber breaches can happen to any business, any size and the repercussions should not be underestimated, leading to damaged reputations, hindered growth and in the worst cases, entrepreneurs being put out of business. Building the resilience of small businesses to cyber crime is important and should be high on all business owners’ list of priorities.”

Unsure about where to begin when it comes to protecting yourself from cyber attacks? Start with this guide to preparing your business for the worst.

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ABOUT THE EXPERT

Hannah Wilkinson is a reporter for Business Advice. She studied economics and management at Oxford University and prior to joining Business Advice wrote for Kensington and Chelsea Today about business and economics – as well as running a tutoring company.

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