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UK SMEs underestimate risks associated with new technologies

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There is a broad perception among UK SMEs that new technologies bring nothing but positive opportunities. Now global insurer Zurich has warned that businesses are underestimating the growing complexity of technology, and end up surprised by the associated risks.

Although there is no shortness of news of reputational damage, data loss and information security breaches, small and mid-sized businesses don’t see the scale of potential risks that come with new hardware, software, social media or Bring Your Own Device (BYOD) policies. Only some 46 per cent of UK SMEs give their staff data security training, and only 28 per cent of the country’s smaller firms review their data security policies and processes. This is particularly concerning at a time of hyper-connectivity within businesses; the European Parliament is proposing large scale changes to data protection regulations, and the UK government recently reported that 87 per cent of SMEs have had a cyber-breach in the last year.

It’s astounding that, despite this, only six per cent of SMEs see new technology trends as having a potentially negative impact, meaning that up to 1.2m UK SMEs do not recognise data loss, cyber-attack or electronic fraud as a threat to them, according to Zurich.

However, the Zurich paper does show that SMEs are closing the “technology gap” on their larger counterparts. Nearly three quarters of small businesses are investing effort in assessing trends in technology and the impact they have on their business – slightly behind the 80 per cent level for larger enterprises. Closing this technology gap will unleash competitiveness for micro and small firms against their larger counterparts.

Tech-savvy small businesses also appear to demonstrate stronger business performance – as defined by business outlook and wider confidence – and they are more aware of the opportunities and impact that emerging technological trends bring. For example, twice as many tech aware SMEs view mobile technology as having a positive impact compared to those which are less tech-savvy.

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