Small businesses are putting their reputation at risk by underestimating the impact of cyber-attacks, new research has found.
KPMG UK and the UK Government’s Cyber Streetwise campaign has found an overwhelming majority (93%) of small businesses think about reputation frequently or all the time but are not considering how a cyber breach could impact it.
Moreover, only 29% of surveyed small companies that have not experienced a cyber or data breach are mindful of the damage one could cause.
The report, entitled Small Business Reputation and the Cyber Risk, surveyed 1,000 senior leaders at small businesses and 1,000 consumers across the UK.
The findings highlight 83% of consumers are concerned about who has hold of their data and whether it is safe, with more than half (53%) saying they would be "discouraged" to use a business again if a breach came to light.
The financial sector is the most likely industry to lose customers because of cyber breaches, with 39% of 599 small businesses surveyed by the same report losing customers this way in comparison to the UK average of 30%.
"Every piece of data in a business can be of interest to a cyber criminal," KPMG UK cyber security practice partner George Quigley says.
"Even if the business itself may not realise it – and with small and medium sized businesses a key target for this very reason – it’s vital to take steps to protect your data, and with it the trust of your customers and ultimately your reputation."
In November 2015, Cyber Streetwise held a forum that revealed SME owners are seeking advice from accountants to improve online security. However, the government-backed organisation added in a blog post that SMEs should consider small steps first.
Elsewhere, the report published in Monday by KPMG and Cyber Streetwise highlights that 85% of small businesses store data in their IT systems however one fifth of this number do not consider the material commercially sensitive.
A vulnerable data-system can leave a businesses’ financial and customer information at risk of cyber attacks , the research adds, but again only one in five (19%) small businesses said they would be immediately concerned about competitors gaining advantage if a breach happened.
New products, services and business ideas are included in intellectual property data that 45% of surveyed small business has in their domain, the survey continues. If this information is not protected adequately customers lose trust and reputations are ruined, it explained.
Vice-Chairman for the Federation of Small Businesses, Sandra Dexter, says small businesses need simple and straight forward advice to protect their data.
"Cyber breaches can happen to any business, any size and the repercussions should not be underestimated, leading to damaged reputations, hindered growth and in the worst cases, entrepreneurs being put out of business."
"Building the resilience of small businesses to cyber crime is important and should be high on all business owners’ list of priorities."