In its recent “SMEs Under Threat” study, financial information provider Experian UK has revealed that British SMEs are unclear about the risks and subsequent costs of a possible breach. Do the findings suggest that small businesses are unprepared for the growing threat of cybercrime?
Cost of breaches underestimated
Experian UK's study has raised concerns that many UK SMEs would not survive a data breach because they underestimate the true financial impact. According to government statistics, a data breach costs a small business around £310,000, but the SMEs surveyed believed the cost to be approximately £179,990 – representing a £130,000 difference.
Head of Data Breach Services at Experian UK, Jim Steven, has stated the findings have “uncovered a vast gulf between how ready SMEs think they are for a data breach and the stark reality”. Moreover, Mr Steven believes businesses aren't considering the “reputational damage and impacted trust” in their valuation.
Widespread breaches in 2015
Mr Steven’s comments, along with Experian’s finding that 74% of respondents experienced a data breach in 2015, suggest that SMEs should reconsider their approach. Overall, 65% of companies surveyed had a data breach plan in place, but just 29% made quarterly updates to them.
Among those without, 51% didn't consider a response plan to be a priority, while 39% believed they weren't at risk. Addressing that 39%, Mr Steven said: “[The] study has uncovered a highly evident ‘it’ll never happen to us’ attitude among Britain’s most vulnerable businesses.”
Meanwhile, consumer awareness of data breaches is on the rise. The study found that 64% of consumers would be discouraged from using a company’s services following a breach, but 54% were convinced improved security measures could actually restore their confidence.
Moving forward, it would appear data response plans can potentially lessen the financial impact to businesses following a breach. However, the survey did find 20% of companies without a plan did not have the budget to create one.
Ultimately, the threat of data breaches means UK SMEs can't afford to push their finances to the limit. Ethical Enforcement Agents like Dukes Bailiffs can help small businesses to collect outstanding invoices in a professional and prompt way, to secure funds for their reserves.