Cyber-attacks could have a serious effect on SMEs’ reputations
It might be an intangible asset but the reputation of any business can have a huge bearing on that company’s ongoing success. In a new survey, 93% of small business owners said they thought about their company’s reputation frequently or all the time.
Despite this fact, only around a third (29%) of SMEs who had not experienced a security breach thought the potential damage that could be caused was an important consideration.
According to other findings in the Small Business Reputation and Cyber Risk report, launched by the Government’s Cyber Streetwise campaign and KPMG, the minority who consider it to be an important consideration are right to do so.
The majority (83%) of consumers now say they are worried about which businesses have access to their data and whether it is secure. More than half (58%), meanwhile, reported that a cyber breach would discourage them from using a business in the future.
86% of procurement departments also said they would consider removing a supplier from their supply chain due to a cyber-security breach. Almost all (94%) procurement managers surveyed said that cyber security standards were an important factor when awarding a contract to an SME in the first place.
A cyber breach could therefore have long-lasting implications that go beyond the immediate costs of repairing the breach. A reputational loss could in fact be more costly and could even lead to a company requiring business turnaround advice if sales and volumes drop sufficiently enough.
Some 89% of those small businesses surveyed who had been the victim of a cyber-attack reported that they felt their reputations had suffered in some way. 31% said they had experienced brand damage, 30% saw a loss of clients and around a quarter received bad reviews online.
More than a quarter (26%) of those businesses experiencing a breach said they had been unable to grow in line with previous expectations and 31% reported that it took more than six months to get the business back on track.
Quality of service was also impacted, with 93% reporting that the security breach had affected the business’ ability to operate.
By Phil Smith