Barely a week goes by without news of a significant data security breach affecting a prominent corporation and its thousands of customers. Cyber crime is big business and the threat is ever evolving and unpredictable.
But criminals are not just targeting global household names – small and medium-sized enterprises (SMEs) are arguably even more vulnerable. In this article we’ll explore the unique challenges facing SMEs and why an active and effective cyber security strategy could be the difference between a secure business and potentially catastrophic losses.
What is cyber security?
Put simply, cyber security is the practice of defending electronic devices, networks and data from attack. And, according to security awareness platform SoSafe, it’s the number one risk facing businesses today.
It’s clearly a broad and complex field. Leading cyber security firm Kaspersky details several categories of cyber security from network security through to data privacy and disaster recovery. As a business owner, it has never been more crucial to be across the various ways in which your whole operation could be compromised.
How big is the issue?
In Capify’s October 2023 SME Business Confidence Survey, over two thirds of respondents were concerned about the threat of a cyber attack on their systems. And that apprehension is well founded: according to the Government’s Cyber security breaches survey, 59% of medium-sized businesses in the UK experienced a breach or attack last year – part of a staggering estimated 2.39m instances of cyber crime across all UK businesses.
And these threats now come in several different forms. Two of the most common are malware – malicious software that’s programmed to access, damage and disrupt your computer systems – and targeted and convincing phishing attacks designed to trick employees into sharing sensitive data.
How relevant is cyber security to SMEs?
The big data breaches may get the headlines but cyber criminals will often look for a trade-off between company size and level of protection – relying on smaller businesses not having the same prevention capability as larger organisations. However, the data that SMEs hold is often just as sensitive and just as valuable.
In short, every business that uses email, smartphones or ever goes online is exposed. And the security of where you work is relevant too. ONS (Office for National Statistics) data indicates that more than a third of businesses in the UK now use a hybrid working model.
What impacts can a cyber attack have?
There are several direct and indirect consequences from a cyber attack but they can broadly be categorized as:
Financial loss: the most obvious risk to a business is funds directly stolen through scams, phishing and malware attacks. Digitalisation World reportins that eight in ten UK SMEs paid a ransomware demand in the past year. Added on to this are the costs associated with recovery from the attack such as restoring systems and lost productivity.
Reputational damage: a cyber attack is likely to have an impact on brand value and victims may lose the trust of their customers. There could also be legal implications from not protecting sensitive information.
Service disruption: Suppliers and fulfilment partners may be impacted and that could jeopardise future business.
Morale: Being a victim of crime is distressing. Staff motivation and confidence could be affected. Rebuilding trust can take time.
What steps can businesses take to mitigate risk?
The first step is to recognise cyber crime as a significant and ever-evolving challenge. The days of relying on just a firewall and antivirus software are over. Traditionally, a lack of awareness has been a key factor in the vulnerability of SMEs.
SMEs likely cannot afford the luxury of hiring specialist staff but thankfully there are plenty of resources available online such as the National Cyber Security Centre’s information hub.
And you can read more detail on the specific steps SMEs can take to manage cyber security risks in our guide here.
What steps can businesses take to mitigate risk?
The short answer is no. In the time it has taken to read this article, there will have been over 20 cyber attacks on UK businesses. And the sophistication and nature of the threat is constantly changing.
The Capify Business Confidence Survey highlighted that UK SMEs continue to face pressing concerns like soaring inflation, energy expenses and weakening demand but they should not overlook the significance of prioritising cyber security as we approach a new year.
A proportional and proactive cyber security strategy is not only fundamental to a successful business in 2024, it could be the difference in determining if that business makes it through the year.
Over the course of the past 15 years, Capify has helped thousands of businesses to meet the challenges of today and the opportunities of tomorrow. With loans between £5,000 to £500,000, Capify’s flexible finance solutions can help businesses invest in the systems and expertise to help protect their operations.
