Small businesses are losing up to £800 million to cyber crime, according to the Federation of Small Businesses (FSB).
The organisation – which has 200,000 members and promotes and protects the interests of the self-employed and owners of small firms – says that cyber crime costs its members £785,000 a year.
The information is revealed in a report (which can be viewed and downloaded by clicking here) produced in partnership with the Department for Business, Innovation & Skills and the Home Office: 'Cyber security and fraud: the impact on small businesses'. It shows that 41% of FSB members have been a victim of cyber crime in the last 12 months with an average cost of approximately £4,000. Three in ten have been victims of fraud, typically by a customer or client (13%) or through ‘card not present' fraud (10%).
The most common threat to businesses is virus infections, which 20% of members surveyed said they had fallen victim to. 8% had been a victim of hacking and 5% had suffered security breaches.
The FSB is concerned that the cost to the wider economy could be even greater as small firms refuse to trade online, believing the security framework does not give them adequate protection. Previous FSB research showed that only a third of businesses with their own website used it for sales.
The report also looks at what steps small businesses take to protect themselves from cyber crime. 36% of respondents said they regularly install security patches to protect themselves from fraud, with almost six in ten regularly updating their virus scanning software. 20%, however, admitted to taking no steps whatsoever.
Mike Cherry, the Federation's National Policy Chairman, said: "Cyber crime poses a real and growing threat for small firms and it isn't something that should be ignored. Many businesses will be taking steps to protect themselves but the cost of crime can act as a barrier to growth. For example, many businesses will not embrace new technology as they fear the repercussions and do not believe they will get adequate protection from crime. While we want to see clear action from the Government and the wider public sector, there are clear actions that businesses can take to help themselves."
The report is introduced by two Ministerial forewards by James Brokenshire, MP Parliamentary Under Secretary for Security, Home Office, and David Willetts, MP Minister for Universities and Science, Department for Business, Innovation and Skills, both pictured above.
Mr Brokenshire said: "Having personally been involved in the cyber security debate for several years now, I am pleased that the Home Office is working with the FSB to highlight the current experiences of small businesses. Cyber security is a crucial part of the Government's National Cyber Security Strategy and we need to make sure that all businesses, large and small are engaged in implementing appropriate prevention measures in their business. This report will help give a greater understanding of how online security and fraud issues affect small businesses, giving guidance as well as valuable top
tips to protect their business."
Mr Willetts said: "The Department for Business, Innovation and Skills published guidance in April 2013, ‘Small businesses: what you need to know about cyber security', based on our comprehensive ‘10 Steps to Cyber Security' guidance. This guidance sets out the current risks, how to manage these, and plan implementation of appropriate security measures. We know only too well of the importance of securing buy-in from both big and small business in implementing appropriate protection against cyber risks – business success can depend on it. Increasing security drives growth. I support all efforts, like the FSB's, to provide clarity on the issues small businesses are facing, and more importantly, what they can do about them. I urge all small businesses to follow the FSB's advice."