SMEs step up spending on cyber-security expertise

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SMEs step up spending on cyber-security expertise

Small and medium-sized enterprises (SMEs) often have a limited pool of internal expertise and will routinely pay for an outsider to provide assistance on certain key issues.

For instance, many legal and procurement consultants will specialise in working with SMEs and will have built a strong relationship with small business owners in their area.

However, a recent study by Barclaycard indicates that many SMEs are shifting their priorities when it comes to the type of third-party assistance they want to bring in.

For instance, figures revealed that SMEs in Britain now spend £2.9 billion a year on cyber-security expertise - or roughly £1,600 per business on average.

With recent incidents such as the WannaCry attack still fresh in people's memories, this seems to be a prudent use of resources, as it helps SMEs ensure they are aware of the latest threats and put preventative measures in place.

But interestingly, the amount being spent by SMEs on cyber-security experts is 43 per cent higher than it was five years ago - a measure of just how high-profile and difficult to ignore this issue has become during this time.

Estimates from Barclaycard suggest this trend is only set to continue, with spending on cyber-security expertise tipped to go up by 32 per cent over the next year.

Payment innovation also a priority for SMEs

With new payment solutions such as contactless technology increasingly moving into the mainstream, SMEs are under pressure to adapt and respond to demand from customers and clients for these options.

As a result, many are bringing in third-party support, with SMEs spending nearly £5,000 each on hiring experts, which works out to £2.9 billion in total.

Spending on payment innovation professionals has gone up by 31 per cent in the last five years, while investment is tipped to go up by 23 per cent in the coming 12 months.

Demand for traditional experts falls

Of course, greater investment in consultants on cyber-security and payment innovation means spending has to be reduced elsewhere.

Some 33 per cent of SMEs have reduced their spending on procurement consultants, as they deem it less relevant than it used to be.

Meanwhile, 15 per cent have trimmed spending on legal and compliance consultants as they want to spend money on new skills to futureproof their firm.

The figures present a good indication of what the priorities are for SMEs at the moment - and in many cases, addressing key issues is paying off.

For instance, 23 per cent of those who stepped up spending on fraud prevention say they have seen a subsequent rise in sales and customer satisfaction. 

It may therefore be that, in many cases, the priorities for SME spending are dictated by their customers and that addressing them swiftly and directly can be a good way to improve customer confidence.

With SMEs under pressure to adapt to technical advances and to changing customer preferences, thrive in an uncertain trading environment and keep up with competitors, the need to spend their budget wisely is clear.

Paying for access to specialists is proving to be a smart way of using limited resources, as it puts SMEs in a position where they can get value from the experts and move forward in a strong position.

SMEs don't know what funding options are open to them

SMEs can only invest wisely and grow if they have sufficient access to finance, which means it can only be considered a worry that many do not know what funding options are available to them.

According to research commissioned by Hiscox, 20 per cent of SMEs are unaware of the range of funding options they could take up.

This was evident in the fact that three-quarters were found to have turned to banks for a loan during the last five years.

Figures also showed that nearly four in ten are relying on European Union (EU) funding, while a similar proportion have chosen equity funding to generate finance.

As a result, a significant proportion of SMEs seem to be overlooking other options such as peer-to-peer loans and crowdfunding.

And for the 38 per cent of firms depending on EU funding, this doesn't seem to be a particularly sustainable approach in light of Brexit.

Some 35 per cent of SMEs said they are worried about the lack of funding options currently open to them - and one of the most popular looks set to be closed off in the next few years.

It is therefore vital that SMEs make sure they are familiar with the plethora of alternative options they can pursue, if they wish to continue expanding their operations and broadening their customer base.

For instance, leasing could be an affordable option for SMEs that want to update their IT infrastructure and office equipment, as it gives them access to the latest options without the commitment of purchasing them outright.