Case Studies

Business cyber survey

by Mark Rowe

Despite the vast majority (93 per cent) of small businesses surveyed thinking about their company’s reputation frequently or all the time, they aren’t considering how a breach could affect it, an audit firm reports. In fact, less than a third (29 per cent) of small companies surveyed that haven’t experienced a breach say the potential damage a cyber breach could cause is an “important” consideration.

However 83 per cent consumers surveyed are now concerned about which businesses have access to their data and whether it’s safe, and over half (58 per cent) say that a cyber breach would discourage them from using a business in the future.

This concern is even greater in the supply chain. Recently published KPMG Supply Chain research supports this; 86 per cent of procurement departments would consider removing a supplier from their roster due to a breach, highlighting that an attack can have serious short and long term implications. Most, 94 per cent of procurement managers say that cyber security standards are important when awarding a project to an SME supplier.

This is reflected by the fact that the majority (89 per cent) of small businesses surveyed who have experienced a breach felt the attack impacted their reputation in some way, with 31 per cent of those having been breached reporting brand damage, 30 per cent reporting a loss of clients and a quarter receiving negative reviews on social media.

One in four (26 per cent) of those surveyed who have experienced a breach have been unable to grow in line with previous expectations, and almost a third (31 per cent) said it took over six months for the business to get back on track. Quality of service is also a risk; those who experienced a cyber breach found it caused customer delays (26 per cent) and impacted the business’ ability to operate (93 per cent).

The lack of concern around potential reputation damage may be explained by the fact that many small businesses don’t realise the value of their data. The vast majority (95 per cent) of small companies surveyed hold data in the IT systems, yet more than a fifth of those surveyed (22 per cent) don’t consider it to be commercially sensitive. Even though customer, financial and IP data can be shared with competitors if a company is attacked, just one in five (19 per cent) small businesses said they would be immediately concerned about competitors gaining advantage if they were breached.

The report also suggests that many small businesses (51 per cent) surveyed don’t think they will be a target for an attack, despite the majority of consumers worrying about the security of their data, especially in the hands of small businesses.

Danny Lawrence, National Cyber PROTECT Coordinator at the NPCC (National Police Chiefs’ Council), says: “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 and medium sized businesses place their reputation and existence on the line if they fail to take action. I would encourage all SMEs 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.”

George Quigley, a partner in KPMG’s cyber security practice, says: “Small businesses know that their reputation is critical to their success but it seems that many haven’t considered quite how many factors can affect it. Every piece of data in a business can be of interest to a cyber criminal – even if the business itself may not realise it – and with small and medium sized businesses a key target for this very reason – it’s vital to take steps to protect your data, and with it the trust of your customers and ultimately your reputation.”

And Sandra Dexter, Vice-Chairman for the Federation of Small Businesses, says: “Small businesses need simple, straightforward cyber security advice like that provided by Cyber Streetwise. 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.”

The Government also offers a free cyber security guide, a free online training course for small businesses and the Cyber Essentials scheme to protect against common internet threats. Visit www.cyberstreetwise.com.

About the research

A thousand small businesses and 1,000 consumers across the UK were surveyed in December 2015 via an online survey. The small businesses surveyed were senior decision makers in businesses with up to 25 employees (including sole traders). The findings in this report refer only to the small businesses and consumers surveyed. The survey of procurement leaders in organisations with 250-plus staff was conducted by KPMG and 3Gem in September 2015.

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