The cost of living in the UK has been steadily rising over the past couple of years. In October 2022, the annual rate of inflation reached 11.1%, the highest it has been in 41 years. As a result, small to medium sized enterprises (SMEs) are struggling to keep up with the increasing costs of running their businesses.
A recent study has revealed that over 1 in 5 UK SMEs are concerned that their business may not survive the current economic uncertainty. These businesses expect that they will have to make significant changes, such as pivoting their business model, in order to stay afloat. With approximately 5.5 million SMEs in the UK, this means that over 1.155 million businesses could be at risk of collapse.
What is even more concerning is that some SME senior leaders are willing to resort to unethical and even illegal actions in order to ensure the survival of their businesses. The study found that these leaders would consider engaging in activities such as committing accounting fraud, lying to bankers or investors to secure funding, and even cybercriminal activity. Some admitted that they would neglect compliance requirements or cut employee salaries and benefits to reduce costs.
The study also highlighted the worrying fact that a third of SMEs have either decreased their cybersecurity spending or have never invested in it at all. Shockingly, 42% of SME senior leaders do not believe that investing in cybersecurity is worth it. They either believe that their businesses are not targets (21%), they have cyber insurance (16%), or they simply do not see it as a priority (10%). Only 25% of SMEs realized the importance of investing in cybersecurity because they could not afford to suffer a breach.
Jamie Akhtar, CEO and co-founder of CyberSmart, understands the pressure that SME decision-makers are under to keep their companies running during these challenging times. However, he strongly discourages any form of criminal behavior and emphasizes the importance of investing in cybersecurity and compliance.
Akhtar points out that the business ecosystem has become highly interconnected, making all businesses vulnerable to cyberattacks. SMEs, in particular, can serve as easy entry points for cybercriminals to target others in their supply chain if they have weak cybersecurity measures in place. While cyber insurance is a useful risk transfer tool, it should not be the sole reliance for protection. Instead, businesses should adopt comprehensive and continuous cybersecurity and compliance strategies to avoid the financial, reputational, and even physical repercussions of a breach. Fortunately, there are affordable solutions available today that can help businesses achieve this.
In conclusion, the rising cost of living in the UK is putting significant pressure on SMEs. Many businesses fear that they may not survive the current economic uncertainty without making significant changes. Some SME leaders are even considering unethical or illegal actions to keep their businesses afloat. Furthermore, a concerning number of SMEs have either decreased their cybersecurity spending or have never invested in it at all. It is crucial for SMEs to prioritize cybersecurity and compliance to protect their businesses from cyber threats.