Small firms could face £52 billion of security fines by 2018
The UK’s army of small businesses could be left reeling by fines for security breaches in the coming years, according to new research.
The Payment Care Industry Security Standards Council has suggested that British businesses could face fines of £122 billion for cyber security breaches in 2918, of which £52 billion will apply to smaller firms.
With firms facing an average of 230,000 cyber-attacks in 2016, the threat to small businesses cannot be underestimated – a view backed by Mike Cherry, chairman of The Federation of Small Businesses.
Small firms face upwards of seven million cybercrimes every year which cost in the region of £5.26 billion, with KPMG suggesting more than 60% of businesses faced such an attack in 2016.
The key for businesses is to ensure that employees are aware of their responsibilities and that they do not take unnecessary risks that could put the company under threat.
With the use of malware and ransomware on the up, more cases of attacks against smaller firms are expected.
The average cost of a cyber-attack can be between £75,000 and £311,000, a significant sum for small firms who operate on tight margins.
Research from insurance firm RSA has suggested that 28% of businesses would face insolvency if faced with unexpected costs of £50,000 or more.
While a degree of contingency planning can protect against such an occurrence, it is still difficult for firms facing large fines or hacking threats to recover.
The research also suggests that smaller firms are not doing enough to protect themselves and that they are placing themselves at risk as a result.
Many firms were found to take a reactive approach to insurance and security, opting only to look into protection after a cyber-attack had already taken place, by which point it could be too late.
Although larger firms can have more sophisticated cyber-security, it has not prevented them from being attacked either, as high profile cases at Tesco Bank, Yahoo and Talk Talk prove.
By Phil SmithView all Business Insights