Nearly 1 in 6 SMEs have been victims of cyber-attacks in the last year

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Grenke Leasing

While high-profile cyber-security breaches affecting large businesses tend to dominate the headlines, the issue is no less important for small and medium-sized enterprises (SMEs).

In fact, SMEs are perhaps even more vulnerable to attack, given that they have fewer resources with which to defend themselves from outside threats, and could therefore pose an easier and more attractive target to opportunistic hackers.

A new study by Zurich certainly suggests that cyber-attackers are actively targeting smaller businesses, with figures showing that 875,000 SMEs have fallen victim to the crime in the last year. This works out to nearly one in six SMEs in the UK.

Interestingly, the report showed that businesses in London seem to be particularly vulnerable to cyber-crime. Almost one in four SMEs in the capital reported that they have suffered a breach in the last 12 months.

These are significant numbers and demonstrate exactly why every smaller business in the UK, and in London especially, needs to take this issue seriously.

The business case for investing in cyber-security measures is even clearer when you look at the financial impact of falling victim to this crime.

More than a fifth of SMEs who have been affected by cyber-crime said it cost them more than £10,000.

Meanwhile, over a tenth revealed they lost more than £50,000 after being targeted by cyber-attackers.

Are SMEs doing enough to protect themselves?

The sheer number of victims and the scale of the financial cost should be enough to ring alarm bells among the SME community.

Yet curiously, many business leaders are not doing enough to safeguard their operations from outside attack.

Figures from Zurich showed that 49 per cent of SMEs intend to spend £1,000 at most on their cyber defences over the coming year.

Meanwhile, 22 per cent said they were unsure how much they would spend on preventative measures in the next 12 months.

Zurich is therefore concerned that smaller businesses are leaving themselves particularly vulnerable.

Paul Tombs, head of SME proposition at Zurich, commented: "The results suggest that SMEs are not yet heeding the warnings provided by large attacks on global businesses.

"While recent cyber-attacks have highlighted the importance of cyber-security for some of the world’s biggest companies, it’s important to remember that small and medium sized businesses need to protect themselves too."

Secure a competitive advantage

Investing in cyber-security not only makes sense for security reasons, but it could also be crucial for SMEs that wish to steal a march on their rivals.

Indeed, the fact that cyber-security has been so high-profile in the media in recent years means it is influencing customers' purchasing decisions.

One in four medium-sized businesses polled by Zurich stated that they have been directly asked by existing or prospective customers about what cyber-security measures they have in place.

Similarly, more than one in ten small businesses have also been asked this question.

As a result, maintaining robust cyber-security defences could be crucial for SMEs that want to both win and maintain business contracts.

Zurich's research indicated that many SMEs are recognising this fact and believe strong cyber-security is giving them an opportunity to stand out from their rivals.

In fact, five per cent of those polled said they have gained an advantage over a competitor because they boast stronger credentials in this area.

"While the rate of attacks on SMEs is troubling, it also shows that there is an opportunity for businesses with the correct safeguards and procedures in place to leverage this as a strength and gain an advantage," Mr Tombs of Zurich said.

The reputational damage that comes with falling victim to a cyber-security breach can be devastating even to larger businesses that carry lots of brand equity.

As a result, it can be devastating to smaller businesses without this reputation and ubiquity to fall back on, so investing in cyber-security shouldn't be considered an optional expense for SMEs.