Cyber security awareness jumps for SMEs

27th April, 2016

Heightened interest in cyber security issues has driven a large increase in the number of small and medium businesses who are becoming more cyber aware according to leading online accountancy software provider MYOB.

The latest MYOB Business Monitor survey highlights that 70 percent of New Zealand SMEs now register concerns with one or more cyber security risk areas, an increase of 10 percent in just six months, with awareness up across all categories.

“This is a hugely significant result and highlights the increasing appreciation amongst small business owners of the importance of good cyber security processes and working with trusted partners to make sure their data is secure,” says MYOB New Zealand General Manager James Scollay.

“The increasingly high profile of cyber security has likely served to increase general awareness of the damage that breaches can inflict on a business’s operations and reputation. The good news is that local SMEs are becoming savvier about their own security and not letting the fear of cyber-crime from stopping them realising the benefits of doing business online.

“It’s positive that SME operators are increasingly taking their data and security so seriously. That’s why MYOB invests so heavily in the security of our cloud software. This investment means that most small businesses level of security will increase when moving to our cloud-based technologies.”

A report by professional services firm PwC states that 59 percent of businesses that use cloud services report that doing so has improved their information security program. Mr Scollay says there are a number of other easy but critical actions small business owners can take to protect themselves online.

“Make sure you have up-to-date, high quality security software and apply all security patches and updates from the provider. Don’t use simple or obvious passwords, use ones with a mix of letters and numbers – use different passwords for your email, banking and system access, and be on the lookout for fake emails that look like they come from trusted sources trying to get you to click on links or download attachments.

“To reduce their exposure to cyber security risk, SME operators can move more of their operations to the cloud where the scale of the security offering is usually fair greater than what they can manage on their own,” says Mr Scollay.

The survey of more than 1,000 SME operators conducted for MYOB by Colmar Brunton reveals that the risk of hackers gaining access to data is the leading online security issue, with 56 percent of SMEs highlighting concerns in this area, up from 42 percent in September.

Losing access to data was also high on the awareness list, concerning 50 per cent of SMEs surveyed – up from 37 percent in September. Almost a fifth of business owners were concerned that the Government might be spying on their data.

When broken out into sectors, the finance and insurance industry are the most concerned about hacking, with 76 percent highlighting this as their key concern – double that of September. The primary sector also register high awareness with 61 per cent of SMEs in the sector worried about losing access to their data and 28 percent concerned about data surveillance by local governments, up from nine percent in September.

Concern March 2016 September 2015
Hackers gaining access to data 56% 42%
Losing access to data 50% 37%
Losing control of data 46% 32%
Competitors accessing data 19% 11%
Data surveillance by local governments 18% 10%

Online presence growing

The MYOB Digital Nation survey also highlighted that 51 percent of businesses now have an online presence and as a result, were experiencing a range of benefits. Over half (58 percent) had experienced an increase in customer inquiries while 53 per cent said customers were finding it easier to do business with them. Almost a third (31 percent) had seen revenue increase as a result of being online.

However, while an online profile is beneficial, cost and connectivity issues are making it hard for SMEs to reap all the potential opportunities of the digital economy. Over a third (38 percent) of businesses surveyed said they were dissatisfied with the cost of their current data plan, while 19 percent said government regulation was also an issue.

Mr Scollay says access to cost-effective, reliable internet infrastructure is an absolute must for businesses, particularly when it comes to keeping pace with ever-changing technology.

“New Zealand’s SMEs need to feel confident in taking their business online and not feel they are hindered by factors such as cost and data connectivity.

“Internet technology is making a fundamental difference to many businesses in every part of the country. To make the most of the opportunities available, we have to ensure there are as few barriers as possible to them establishing an online presence.”

Satisfaction with access and connectivity static

Satisfaction with internet access (speed and reliability) has remained static in the latest MYOB Business Monitor, sitting at 40 percent in March 2016 and September 2015. Levels of dissatisfaction however have increased slightly, up from 34 per cent to 36 percent.

On the whole, businesses in the construction and trade sector were the most satisfied with their internet access (55 percent), while dissatisfaction is highest in the primary sector (44 percent). Christchurch business owners remain the most dissatisfied with their internet access, on 44 percent, followed by operators in Taranaki (43 percent) and Otago and Southland (39 percent). Forty-eight per cent of SME operators in Wellington and 40 percent in Auckland are happy with their internet access.

Mr Scollay says while the roll out of high-speed broadband is proceeding across the country it is clear some areas are still waiting to see the benefits of faster, more reliable connections.

“Access to the internet has been essential for some time now and it is a resource every sector in every area of New Zealand can, and should be able to, tap into.”

UFB uptake still limited amongst SMEs

While 63 per cent of SME operators believe an Ultra Fast Broadband (UFB) connection would positively benefit their business – up from 60 percent in September – just 24 percent of local businesses report that they are utilising fibre services.

The most connected city is now Wellington (28 per cent), followed by Auckland (26 percent). Christchurch has significantly increased its connectivity, up to 24 percent from 18 percent in September.

In the regions, Marlborough (36 percent) has the largest number of businesses using a UFB service, while the Otago/Southland region has shown the most growth since the last MYOB Business Monitor. The region, which includes Chorus’ Dunedin “Gigatown”, increased from just 12 percent in September to 33 percent in the current survey.

Business operators in the manufacturing and wholesale (73 percent) business, professional and property (67 percent), and finance and insurance (61 percent) sectors believed UFB would have the most positive impact.

Pace of technology pleasing

While 60 per cent of businesses said they were happy with the pace technology was moving, 17 per cent believed it was too fast. Nineteen per cent said it was moving too slowly and needed further investment.

Outside the major cities, in areas such as the Bay of Plenty and Taranaki, many SMEs said they struggled with the pace of technology, whereas SMEs in larger areas were more likely to feel comfortable with how fast technology was changing.

Amongst the sectors, the manufacturing and wholesale sector is clear in their need for more investment, with 28 percent of the sector believing technology is changing too slowly in New Zealand.

Mr Scollay says it is apparent that businesses need to feel comfortable with technology, and have the means to upskill when necessary.

“It is more than clear that businesses that are online and are staying abreast of technology are doing better across the board,” he says.

“And in order to ensure that New Zealand SMEs stay up to date and in turn, drive the country’s economy, it is important we focus on the roll out of UFB – particularly into the regions – so that everyone has the same opportunities, wherever they may be located.

“By making it easy as possible for businesses in every sector to adopt the newest technologies, New Zealand’s economy will become even more diverse, competitive and internationally recognised.”