UK’s SME Sector Especially Vulnerable To Cyber-Attacks

By 18th March 2021Blog

The Federation of Small Businesses has claimed that 99.9 per cent of the UK’s six million-strong private sector businesses are made up of small and medium-sized enterprises (SMEs), and employ more than 60 per cent of the country’s workforce.

City AM reports that according to a strategic report from telecoms provider Vodafone, ‘Protecting our SMEs, cyber-security in the new world of work,’ the UK’s economic recovery from the pandemic could be compromised and significantly delayed unless action and new policy recommendations begin to tackle the rising tide of cyber-criminality.

SMEs had been subjected to increasing surges in cyber-attacks since well before the advent of the pandemic, mostly due to an absence of cyber-security resources and solutions to prevent hacks and security breaches.

A report published shortly before the pandemic revealed that 40 per cent of all global cyber-attacks were on SMEs, with the average loss per attack reaching $188,000 (£136,000).

Further to that, with SMEs being identified as a week link in the commercial chain, cyber-criminals used these sophisticated attacks to piggyback exploit larger organisations further up the chain.

Before the pandemic, cyber-attacks cost the UK economy £34 billion a year and, as the Vodafone research highlights, 31 per cent of UK SMEs have reported an increase in attacks which began at the time of the first national lockdown in March 2020.

It was then inevitable that a year on from the outbreak, this rate will now be even higher, especially considering that the majority of employees of SMEs (approximately 75 per cent) are now working from home, where there are even larger gaps in cybersecurity.

Vodafone’s report stresses that the SME sector is vital to the UK’s macro-economy that it needs and deserves direct government support in the form of a cyber-security policy designed specifically to protect and help it.

Vodafone’s recommendations include calls for an immediate reduced VAT rate to be introduced on cybersecurity products, and for extra investment and resources to be ploughed into the National Cyber Security Centre so that it can increase and improve its cybersecurity for small businesses capabilities.

The report also added that the government should provide a further five per cent to the National Cyber Security Strategy budget fund provision of local cybersecurity skills and training while the enhanced and re-focused national R&D budget should go towards the development of cybersecurity products and to research centres in the North and Midlands.

The report shows that 41 per cent of SMEs have suffered cyber-attacks and 20 per cent had experienced multiple attacks (six or more times) over the past 12 months. It is estimated that 1.3 million UK SMEs would fail and collapse completely after falling victim to a cyber-attack.

The average cost of an attack on an SME is calculated to be £3,230 and 23 per cent of them agree with Vodafone that they would not be able to survive such a loss, and would be forced to close their doors.

A further 16 per cent say they might just about stay in business on a reduced basis but would have to shed staff while 22 per cent say an attack would either wipe out their dwindling financial reserves or leave them in a parlous financial position.

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