While technological advances are vital to the running of small businesses, two in five (42%) of small and medium-sized enterprise (SME) owners consider the vulnerability of their technology to be the single largest concern to the success of their company.
The latest SME Risk Index from Zurich showed that of all the technological vulnerabilities, business owners see cyber-attack (38%) as the most harmful to their business, followed closely by data loss and privacy breaches (37%).
Zurich said it was not surprised to see concerns so high, considering the rising importance of tech in business. More than a third of small business owners stated that emerging technology, mobile technology and app development (34%) provide the greatest opportunities for growth, while one in five (20%) said that web trading was most important.
In light of this reliance on technology, small business owners have highlighted that operational challenges have emerged as prominent risks to the business (28%), with the largest operational issues also in technology. Effective IT management was seen as the largest risk to business performance by more than a third of SMEs (34%), while preventing cyber security is proving a headache for one in four business owners (25%).
Encouraging, though, is that decision makers in the UK’s SMEs are identifying these risks and opportunities early and demonstrating an awareness of the need to stay secure and competitive. While one in five highlighted emerging online competition from other firms posing a threat to their profitability (20%), more than a quarter of small businesses (28%) are actively investing in business assets and operations, taking steps to stay at the head of the pack.
Anne Griffiths, head of SME propositions at Zurich UK, said: “As consumers fully immerse themselves in the digital age, businesses must change to meet the changing needs of the market. When we speak to business owners we are seeing that change, as small companies across the UK are going digital to stay competitive, to keep profitable and to meet the evolving needs of their customers.
“As technology becomes more prevalent, so do the risks to sensitive data and information. It is encouraging to see the number of small businesses identifying cyber security as a major risk and focusing on operational investment to make their businesses secure increases. But as we learn more about the true dangers of hacking and data breaches, business must do more to educate one another and prevent the risk of cyber crime.”