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SMBs Expect Lenders to Cover Cybercrime Losses - Don't Bank On It!

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The typical small to medium sized business (SMB) faces an increasingly high probability of financial loss due to online cyber security fraud and malware attacks.

This simply stated fact of business life comes from the UK's Federation of Small Businesses (FSB), which this month partnered with the British government's Home Office to launch an insightful piece of cyber security focused analysis and commentary.

This new study highlights the financial burden firms are placing themselves under in light of current risks. According to the report 41 per cent of FSB members have been a victim of cybercrime in the last 12 months, putting the average cost at around £4,000 (US$6,000) per business.

The most common threat to businesses is virus infection says the FSB, which 20 per cent of respondents said they have fallen victim to. A further eight per cent have been a victim of hacking, while five per cent have suffered security breaches.

Banks are not cybercrime protectors

Only 36% of SMBs are reported to be installing software patches as a regular part of their IT and data security procedures, but even more surprising is that 45% of small to medium sized firms are compounding the problem by expecting their banks to help protect them against the risk of financial loss from cybercrime.

National policy chairman for the Federation of Small Businesses Mike Cherry is quoted as saying that cybercrime poses a real and growing threat for small firms and the responsibility for protection lies with SMBs themselves.

Most reliable defence is self-defence

There are some straightforward conclusions and takeaways to draw from this report and commentary.

First, any SMB that expects their bank to cover them against cybercrime and online fraud, or indeed protection against virus infection and malware needs to think again.

The best-placed resource to help a small business is a trusted security service provider and/or a managed service provider with a security layer within its core offering.

The FSB's top two tips for business are i) implement a combination of security protection solutions (anti-virus, anti-spam, firewall) and ii) carry out regular security updates on all software and devices.

Clear and present danger

If all of this sounds fundamental and obvious there is plenty in the report to show that cybercrime is a clear and present danger to SMBs. For example, around three in 10 (13%) of FSB members have been a victim of payment fraud, typically by a customer or client.

Business internet security and services are readily available to stop this kind of thing happening to you. It is up to every small business to take responsibility for its own security, those that leave it up to their banks must face the consequences.