Data loss, along with issues around online marketing and social media, are major concerns.
British small and medium-sized enterprises (SMEs) fear that technological risks will hamper their longterm success, it has been revealed.
The Zurich SME Risk Index, which measures the perceived level of business risk faced by British SME owners and decision makers, is at its lowest level in 18 months – falling from 42.61 points in Q3 to 41.68 in the fourth quarter. Yet despite another consecutive rise in business confidence, the longer term risk of emerging technological vulnerabilities remains a threat.
While more than one in four of the decision makers surveyed (27%) say that online marketing and web trading offer one of the top three opportunities for their business, almost two-fifths (39%) are worried about vulnerabilities associated with the use of technology.
Almost two fifths (36%) cite the failure of local network systems as one of the three biggest technological risks to their business. Almost a third (31%) named cyber-attack, and more than a third (35%) say data loss is one of their three biggest risks. The threat to their business’ social media reputation is one of the three top risks for 15% of SMEs.
Richard Coleman, director of SME at Zurich Insurance, said: "It’s very encouraging to see that 41% of SMEs experienced growth in the last quarter, and that the vast majority have avoided emergency measures to cut costs and improve business performance.
"As we saw in Q3’s Risk Index survey, growth presents new, exciting opportunities for small businesses, particularly in areas like recruitment and web trading. While it’s important for business owners to avail of these opportunities, it’s also important that they plan sufficiently ahead for the long- term risks on the horizon, such as the significant changes underway in technology and workforce structure.
"Traditional risks like severe weather should also not be overlooked. Only 3% of SMEs report that flood prevention measures are one of their three most serious operational risks. With flooding in recent months causing disruption to many businesses, it’s likely that many SME owners need to consider moving major incident risk management closer to the top of their priority list. Whilst these are insurable incidents, a focus on prevention, preparedness and mitigation is invaluable in the event of an incident, and ensuring a speedy return to business."