Small business increasingly ‘vulnerable to cyber attacks’: COSBOA

The risk of cyber attacks is growing for small businesses with four in 10 having experienced an attack already, a recent report reveals.

Three quarters of small business owners are concerned about the risks of a cuber attack and 44 per cent have experienced a cyber attack, according to a report by the by the Council of Small Business Organisations Australia (COSBOA).

The Small Business Perspective Report 2023 also found that half of all small businesses have basic password vulnerabilities.

Around 46 per cent of small businesses still share passwords and only 53 per cent have turned on multi-factor authentication in all circumstances.

The report also found that less than a third of small businesses demonstrate behaviour consistent with all of the Essential 8 cyber security behaviours.

The impact of cyber attacks on supply chains

Small businesses consider the biggest risk of cyber attacks to be their potential to disrupt entire supply chains.

For example, the report noted that third-party tech providers who experienced a breach could produce flow-on risks for small businesses who use their services, even if those small businesses are prepared themselves.

“Other leaders believed that less prepared business partners in their supply chain could be prone to attaches, which would ultimately impact them as well,” the report said.

Challenges in addressing cyber security

Small businesses remain largely unprepared in their ability to defend themselves against cyber attacks despite improved awareness about cyber security.

Around half of all small businesses in the survey had low confidence in their ability to fight a cyber attack or recover from one.

“Half of small business owners feel that addressing cuber security is too hard, cost prohibitive and complicated to maintain,” the report stated.

“Most industry leaders mentioned a common complacency around the enormity of risks until attacks actually occur, as well as a common misconception that small businesses are less targeted than larger businesses.”

Business owners are also concerned about the stigma or fear of embarrassment that might arise from speaking out after being attacked.

Around half of all small businesses felt that a breach was inevitable, while 47 per cent stated that cyber security is too complicated for small businesses to set up and maintain.

Four in ten small businesses also said cyber security practices take more time and difficulty than is worthwhile for most small businesses.

Cost a barrier for cyber insurance

Comprehensive cuber insurance is viewed as too expensive for most small businesses, according to the report.

Business owners tend to attain general insurance with a cyber option instead, the report found.

“[Industry leaders] also spoke about the cognitive dissonance that may arise around the perceived importance of taking action and not spending money to be fully prepared,” the report said.

This article was originally published on HR Leader's sister brand Accounting Times.