UK SMBs are the most vulnerable to cyber attacks

British small businesses (SMBs) are more likely to be hit by cyber attacks than those in other countries, with two in five falling victim last year.

Globally, 29% of organizations have been hit by a successful cyber attack in the past year, according to the tenth annual Hiscox Cyber Readiness Report. However, for UK businesses, the figure's substantially higher, at 38% – making it the most-affected country worldwide.

UK SMBs are spending less to remediate these attacks, with an average cost per attack of $35,908, compared with $52,000 globally. On average, incidents caused around 32 hours of operational disruption.

But, commented Jamie Akhtar, CEO and co-founder of Cybersmart, "While the average cost of an individual attack in the UK may be lower than the global average, the higher proportion of businesses being successfully compromised means many more firms are being exposed to those costs in the first place."

Meanwhile, small UK firms are failing to insure themselves adequately against cyber attacks, according to Hiscox, with only four-in-ten having cyber coverage, compared with around 63% of medium-sized firms and seven-in-ten FTSE 100 companies.

UK firms are actually spending more than average on cyber resilience, at $59,700 – the third-highest spend – compared with a global average investment of $51,000. Just over half of firms are adopting new technology, with 55% investing in specialist staff and 62% updating employee training.

The reasons for the greater vulnerability of UK firms aren't apparent.

"These are some concerning results, and it's not clear why the UK is suffering a larger volume of attacks compared to other countries," said Keven Knight, CEO of Talion Cyber Security.

"It could be as a result of geopolitical instability, or it could be because of the wave of attacks against retailers from last year, which might have spurred attackers to target businesses in the region."

However, there also appears to be a link between cybersecurity performance and executive compensation: globally, 32% of firms said executive pay is now linked to cybersecurity performance, while the figure was just 25% for UK firms.

Overall, cyber attacks are costing small businesses dear, with 32% saying they have delayed growth and expansion plans, and 31% that incidents have increased staffing costs. Three-in-ten said they'd experienced financial damage and 29% that they'd lost business opportunities. Even more – 48% – cited reputation and customer trust as the most significant cyber-related risk.

"It's never just about containing an incident initially and moving on, that's naive and unrealistic. It's the aftermath of an attack, where organisations have to work through the financial losses and operational downtime, that causes the greatest damage," said Knight.

"Downtime doesn't just mean being locked out of computers, it means disruption to service, disruption to employees and their ability to perform their jobs, plus disruption to customers because they are unable to access the services or goods an organisation provides to them. Every second of downtime costs the business money."

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