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Small Business Reputation & The Cyber Risk
Small Business Reputation & The Cyber Risk
UK small businesses are underestimating the impact a cyber attack could have on their reputation and must take steps to protect it, according to the findings of the Small Business Reputation and the Cyber Risk report, by the Government’s Cyber Streetwise campaign and KPMG.
Highlights
- Less than a quarter of small businesses cite cyber security as a top concern, but it’s of vital importance to consumers and within the supply chain
- Small businesses value reputation as a key asset, yet underestimate the likelihood of a cyber breach and its impact
- The impact of a cyber breach can be huge and long lasting, affecting brand, client retention and ability to win new business
- Cyber attacks risk quality of service
In the past few years there has been a rapid expansion in the development and adoption of new communications technologies which continue to transform Government, business and the ways in which we interact with each other. Cyber crime undermines confidence in our communications technology and online economy. There were an estimated 5.1m incidents of fraud and 2.5m incidents falling under the Computer Misuse Act recorded last year (ONS, 2015)1. Add in recent high profile hacking cases and the issue of cyber security is now more important than ever.
But is it front of mind for small businesses? Cyber Streetwise and KPMG surveyed 1,000 small businesses and 1,000 consumers across the UK to assess how small businesses feel about cyber security, how they are protecting themselves and the impact of a cyber breach on their reputation.
Key findings:
- Cyber security was cited as one of the top concerns by less than a quarter of small businesses (23%), yet it is fast becoming the only way to do business:
- 83% of consumers surveyed are concerned about which businesses have access to their data and 58% said that a breach would discourage them from using a business in the future.
- Recently published KPMG Supply Chain research supports this2; 94% of procurement managers say that cyber security standards are important when awarding a project to an SME supplier and 86% would consider removing a supplier from their roster due to a breach.
- 83% of consumers surveyed are concerned about which businesses have access to their data and 58% said that a breach would discourage them from using a business in the future.
- UK small businesses value their reputation as one of their key assets. Yet they are hugely underestimating the likelihood of a cyber breach happening to them and its long term impact:
- 60% of small businesses surveyed have experienced a cyber breach, but only 29% of those who haven’t experienced a breach cited potential reputational damage as an ‘important’ consideration.
- 60% of small businesses surveyed have experienced a cyber breach, but only 29% of those who haven’t experienced a breach cited potential reputational damage as an ‘important’ consideration.
- The impact of a cyber breach can be huge and long lasting. 89% of the small businesses surveyed who have experienced a breach said it impacted on their reputation. Those who experienced a breach said the attack led to:
- Brand damage (31%)
- Loss of clients (30%)
- Ability to win new business (29%)
- Brand damage (31%)
- Quality of service is also a risk. Those surveyed who experienced a cyber breach found it caused customer delays (26%) and impacted the business’ ability to operate (93%).
part of the Crime Survey for England and Wales. It should be noted that these capture incidents which may not meet the threshold of a crime under the Home Office Counting Rules. http://www.ons.gov.uk/ons/rel/crime-stats/crime-statistics/year-ending-june-2015/sty-fraud.html
News
© 2020 KPMG LLP, a UK limited liability partnership, and a member firm of the KPMG network of independent member firms affiliated with KPMG International Cooperative, a Swiss entity. All rights reserved.
KPMG International Cooperative (“KPMG International”) is a Swiss entity. Member firms of the KPMG network of independent firms are affiliated with KPMG International. KPMG International provides no client services. No member firm has any authority to obligate or bind KPMG International or any other member firm vis-à-vis third parties, nor does KPMG International have any such authority to obligate or bind any member firm.
This article represents the views of the author only, and does not necessarily represent the views or professional advice of KPMG in the UK.
