The digital acceleration continues to gain momentum and with it, the risks posed by cyber crime are rapidly mounting. A recent survey of UK business leaders, conducted by Aviva in partnership with YouGov, reveals the cyber security risks that businesses are most concerned about in 2024 and the steps they are taking to address them.
Rising Concerns Over Cyber Attacks
Compared to last year, a staggering 17 percentage points more businesses now view cyber security as a major risk. For large corporations with complex technology stacks, cyber threats rank as the top concern at 46%. Mid-market companies see it as their second biggest risk at 38%, trailing only behind shortages of skilled workers.
However, small businesses seem to be underestimating the cyber threat, ranking it 6th at just 17%. With heavy reliance on third-party services, many small companies may not fully grasp their vulnerability to breaches. Overall, worries over cyber attacks have jumped from 40% in 2020 to 57% today.
The Impact of Cyber Crime
The Aviva research shows that 1 in 5 UK businesses have fallen victim to a cyber attack in the past year. For large corporations, that figure rises to a alarming 1 in 3. No company is immune, as attacks occur across businesses of all sizes.
Beyond the direct financial costs, which exceeded £10,000 for over a quarter of businesses, cyber incidents wreak havoc in multiple ways. 32% of attack victims suffered operational disruptions, 21% experienced data loss and system lockouts and employee stress levels saw a two-fold increase in larger businesses. Regulatory obligations around customer data add further complications.
Protections and Vulnerabilities
Most business leaders (56%) are quite confident in their cyber security measures, especially among corporates where 64% believe their protections will hold up. However, if an attack does occur, that confidence wanes. Just 51% of businesses overall and only 39% of small companies, feel certain about the appropriate response steps.
Data loss and breaches are the top concern across the board at 54%. For small businesses, malware ranks second at 45%, while mid-market and corporate leaders are more worried about operational disruptions due to the interconnectedness of their systems. Other major fears include ransomware attacks, reputation damage, loss of customer trust, and direct financial impacts.
The Cyber Insurance Gap
Although the cyber insurance market is expanding, only 37% of businesses see having cover as important or are planning to obtain it. Smaller companies are often unaware these policies exist. Notably, the number of businesses that think they have cyber insurance often exceeds those that actually do - a dangerous misconception.
Of companies that have cyber policies, just 45% reviewed their cover in the past year. Mid-market businesses are the most proactive at nearly two-thirds, while time-strapped small companies are least likely to examine their policies. Encouragingly, 56% aim to maintain their current level of insurance and 9% plan to increase it.
Preparing for the Future
Looking ahead, 56% of business leaders are anxious about evolving technologies and the implications for their business models and cyber defenses. It's clear that as digitization creates new growth opportunities, it simultaneously amplifies cyber risks.
Stephen Ridley, Aviva's Head of Cyber, notes that companies frequently turn to cyber insurance only after experiencing an attack. However, these policies go beyond just covering damages - they provide vital access to experts for urgent incident response.
In today's digital age, proactive cyber security is not optional. It's an absolute necessity for businesses to remain resilient in the face of escalating threats. Robust defenses, comprehensive insurance and well-planned response strategies are all critical components. Now is the time for business leaders across every sector to move cyber security to the top of the agenda - before the next attack strikes.
Link to the full Aviva Report here: https://static.aviva.io/content/dam/document-library/broker/avivacyberreport2024.pdf
