A new report from the Federation of Small Businesses (FSB) has found that small firms are unfairly carrying the cost of cyber crime in an increasingly vulnerable digital economy.
The report, ‘Cyber Resilience: How to protect small firms in the digital economy,’ suggests smaller firms are collectively attacked 7m times per year, costing the UK economy an estimated £5.26bn.
Despite the vast majority of small firms (93%) taking steps to protect their business from digital threats, two thirds (66%) have been a victim of cyber crime in the last two years. Over that period, those affected have been victims on four occasions on average, costing each business almost £3,000 in total.
Cyber crime costs small businesses disproportionately more than big businesses when adjusted for organisational size. Currently the responsibility largely falls on small businesses to protect themselves. FSB is calling for more support to be given to those smaller firms least able to bear the burden of the increasing global cyber threat.
Almost all (99%) of the UK’s 5.4m small firms rate the internet as being highly important to their business, with two in three (66%) offering, or planning to offer, goods and services online. Without intervention, the growing sophistication of cyber attacks could stifle small business growth and in the worst cases, close them down.
Mike Cherry, FSB national chairman, said: “The digital economy is vital to small businesses - presenting a huge opportunity to reach new markets and customers - but these benefits are matched by the risk of opportunities for criminals to attack businesses.
“Small firms take their cyber security responsibility very seriously but often they are the least able to bear the cost of doing so. Smaller businesses have limited resources, time and expertise to deal with ever-evolving and increasing digital attacks. We’re calling on government, larger businesses, individuals and providers to take part in a joint effort to tackle cyber crime and improve business resilience.”
The types of cyber crime most commonly affecting small businesses are phishing emails (49%), spear phishing emails (37%), and malware attacks (29%).
Small firms are also concerned about hacking and fraud when the card is not present, with the average information breach setting them back 2.2 days.
To combat this, four in five small firms (80%) use computer securing software, and well over half (53%) perform regular updates of their IT systems.
The FSB report also found room for small firms to improve security. Currently just a quarter of smaller businesses (24%) have a strict password policy, 4% have a written plan of what to do if attacked online, and just 2% have a recognised security standard such as ISO27001 or the government’s Cyber Essentials scheme.
Mr Cherry added: “Small firms are understandably focussed on building their businesses and creating the jobs which drive economic growth. The vulnerabilities of the digital world affect everyone and the responsibility for improving resilience should not be left to the group with least resource to do something about it.
“Security is important, but given that an element of risk will always be present when operating online, resilience must also be championed. Without a concerted effort to reduce cyber crime and improve resilience, small businesses could be at real risk.”
There needs to be significant simplification and consolidation of cyber security information provided by government. The National Cyber Centre should become the hub for this, providing a one-stop-shop for advice and guidance for all small businesses alongside a determined marketing effort to ensure businesses are aware of it.
Schools should try to incorporate digital learning so that young people have a better understanding of the dangers of being online and are educated about how to be cyber secure.
There should also be better incentives for small businesses to encourage them to invest in cyber resilience measures and adopt best practice when it comes to increasing their cyber resilience.
The law enforcement response to cyber crime must be improved at the local, regional, national and international levels. There must be more investment by the government in law enforcement resources to effectively tackle cyber crime. Businesses should be encouraged to report every crime and they must be reassured that it will be taken seriously.