Cybercrime – how vulnerable is your business?

Virtually all business is now conducted digitally to one extent or another, with the pace of change ramping up significantly during and since the Covid pandemic. Increasing reliance on remote connectivity, including AI-devised systems, is bringing us closer together and increasing our exposure to potential online threats and criminal activity.

Global Industry

Cybercrime is an expanding and increasingly sophisticated global industry that exploits weak security in all forms; technical, procedural, and human error. It’s shocking that 1.5 million UK businesses experienced a cyber attack or attempted criminal activity in 2023.

Be aware of the risks to your business

Wherever you are on your digital journey, make it your business to know about possible cyber vulnerabilities and take steps to make your business as target-proof as possible. This is particularly relevant as the deadline for full compliance with ‘Making Tax Digital’ is April 6 2026.

SMEs are vulnerable

Big organisations grab the headlines, but small businesses are vulnerable too. Don’t be lured into a false sense of security by thinking that cyber criminals only target big businesses or public organisations. We hear about attacks affecting thousands of NHS patients, Transport for London experiencing a data breach that impacted the service for six months, and regular reports of bank customers being locked out of their accounts.

What we don’t hear about are the independent businesses whose websites have been cloned, payment gateways that have been intercepted, password infringements that have led to unauthorised access, or employees falling foul of corporate phishing scams.

Smaller businesses are easy targets, often lacking the resources and technical expertise to recognise the threats they face and to protect themselves adequately. Cybercrime is one of the biggest threats facing businesses and is estimated to have cost the UK economy around £30 billion last year.

How exposed is your business?

Your business is potentially exposed if you engage in any form of digital/online activity. Even basic interfaces, like email, can increase your exposure. Does your business engage in any of the following activities?

Communicate via email
Use social media/digital marketing platforms
Bank online
Have an e-commerce website
Store customer information on a database
Store data on cloud servers
Have an EPOS and stock database
Take electronic payments

Top 5 cyber-threats to UK business

Phishing scams
Ransomware
Malware
Social engineering
Exploitation of cloud-based information

It’s worth noting that of these threats, phishing scams are by far the most prevalent and successful as they rely on human error.

The principal causes of security breaches are often very basic:

Weak or shared passwords
Human error
Vulnerabilities in software and systems
Insider threats
Third-party security risks
Lack of encryption
Social engineering
Malware and ransomware

How to protect your business from cyber attack

All businesses are exposed to some degree, no matter what you’ve put in place. However, being aware of potential weaknesses, applying routine digital security procedures, keeping your systems updated and making your staff aware of their responsibilities will help thwart most mal-intent.

If you’re concerned, or have a business which could be crippled for any length of time or worse, you need to consider taking advice from a cyber-security protection specialist.

Cybercrime is a growing consideration for the insurance industry

Cyber insurance is featuring far more in business risk protection with some policies including basic provision as standard. There’s a wide range of policy types and levels of protection available, but in general, cyber insurance can be arranged to cover the following risks:

First-party insurance covers your business assets:

Loss or damage to digital assets
Business interruption from a cyber event
Cyber extortion
Customer notification expenses
Reputational damage
Theft of money or digital assets

Third-party insurance covers the assets of others:

Security and privacy breaches
Multi-media liability
Defamation, breach of privacy or negligence
Denial of access, and failure of software or systems
Investigations, defence costs and civil damages

Expensive, but worth it?

Although it can be expensive, the benefits of having cyber insurance may outweigh the cost if your business is disrupted, as the costs of recovery and securing systems alone can be very high. Depending on your level of coverage, cyber insurance can also include access to security specialists. The faster a breach can be identified and dealt with, the less damage will be done, protecting your financial assets and possibly, your brand reputation.

Having dealt with the immediate danger, experts will carry out forensic assessments of the source of the data breach or attack and will advise you on what needs to be done, including gathering any evidence of criminal activity from within your organisation.

As with any form of specialist insurance, there’s no one-size-fits-all recommendation and all policies are different and costed accordingly. It’s just one option and being well-informed and prepared to adapt is the best protection, with or without insurance.

We’re here to help…

As accountants, we can’t offer specific advice as to a suitable course of action, but we do ensure our systems are secure and that your business is not at risk by interacting with ours. We use secure portals for exchanging sensitive financial information and for document transfers between ourselves and the financial authorities.

If you would like more information or have questions or concerns, please contact us on 01482 631700 or use our contact form: https://www.rackhamsaccountants.co.uk/contact-the-team

Our website ‘terms of business’ page also explains how we store and use your personal data: https://www.rackhamsaccountants.co.uk/terms/