The True Cost of Cybercrime on the UK's SMEs: Financial, Operational and Reputational

As cybercrime continues to increase at an alarming rate, businesses of all sizes are feeling the effects. However, SMEs are disproportionately targeted as they are generally seen by hackers as easy targets. In this blog, we will be looking at the true cost of cybercrime on the UK's SMEs, from the financial and operational costs to the reputational losses that these businesses incur.

What Do We Mean By ‘The True’ Cost?

The true cost of cybercrime is not always immediately clear, as the impacts can be both direct and indirect. For example, a direct cost could be financial, such as the loss of revenue from being unable to trade for a period of time due to an attack or having to pay a ransom. Indirect costs are more difficult to quantify and can include things like reputational damage to your business or the impact on employee morale. Some of the detrimental effects that cybercrime has on small businesses in the UK include:

Cybercrime Can Cause Financial Losses The most obvious cost of falling victim to a cyber-attack is the financial loss that can be incurred. This can come in many forms, from the direct loss of revenue if you are unable to trade for a period of time, to the indirect costs associated with things like data breaches and recovery efforts. In 2021 the average cost of a single data breach to a small business was estimated to be around £3,000.

Cybercrime Can Disrupt Business Operations As well as the direct financial costs, cybercrime can also cause significant operational disruption for businesses of all sizes. This is often due to the need to halt operations in order to deal with the fallout from an attack, such as conducting a forensic investigation or implementing new security measures. In the most severe cases, businesses may need to completely rebuild their systems from scratch, which can take months or even years.

Cybercrime Can Damage Your Reputation One of the most difficult-to-quantify costs of cybercrime is the damage that can be done to your business's reputation. This can be both direct, in the form of negative media coverage, and indirect, through the loss of customer trust and confidence. Customers and consumers may stop using a business that had been the victim of a data breach.

No Business Is Immune To Cybercrime.

Small businesses are now the most common target for cyber-attacks. This is because they often don't have the same level of security measures in place as larger businesses do and they aren’t necessarily aware of all the risks. Research undertaken for the Cyber Security Breaches Survey 2022, reported; “Smaller organisations take little proactive action on cyber security, this is driven by a lack of internal knowledge and competing priorities with their budgets. This is especially true if they have no relationship with outsourced cyber security providers. They often have a fear of the technicalities of cyber security and a preference not to research and mitigate against the risks they presented. They are aware there could be a potentially devastating impact but were not sure of the specifics and felt it was a low priority. Smaller organisations tend to seek out information and advice on a reactive basis.”

Astounding small business and SME figures published in the 2022 Cyber Security Breaches Survey:

48% of small businesses identified a breach or an attack in the last 12 months.
The most common attack on small businesses was a phishing attack (83%)
The average financial cost associated with a cyber-attack on small businesses is over £3000 per attack.
Only 37% of small businesses have a cyber security strategy which details all policies and processes relating to cyber security.
Only 10% have a specific cyber security insurance policy, and only 40% had cyber security included as part of a wider insurance policy.
Only 26% of small businesses undertake cyber security training for their staff.

How to Protect Your Business from Cybercrime

So, as we can see, the true cost of cybercrime on the UK's SMEs is much greater than just the financial loss. Small businesses in particular need to be aware of the dangers and take steps to protect themselves. Cyber insurance https://ronin-pentest.com/Blog/cyber-security-insurance is one way of mitigating some of the risks, but businesses first and foremost need to invest in robust cyber security measures https://ronin-pentest.com/services to reduce the chances of becoming a victim in the first place. This includes firewalls, antivirus software, and strong passwords. You should also keep your systems and software up to date, as well as educate your employees on the importance of cyber security.

Cybercrime is a real and ever-present threat to businesses of all sizes. By understanding the true cost of cybercrime, you can protect your business from the financial, operational, and reputational damage that can be caused. If you think your business might be at risk, get in touch https://ronin-pentest.com/contact with us today.