61 FSB Think of crime affecting a shop, and your mind will likely immediately go to shoplifting. Every shop owner is all too well acquainted with the frustration and losses caused by shoplifters, and the risks that can arise from confronting suspected thieves. But while shoplifting is very much a huge problem for the retail sector, shops are – like all other types of business – also at risk from a less tangible and visible but potentially even more devastating form of criminal activity, namely cybercrime. While high-profile cyberattacks that have caused huge losses and disruption to household names have hit the headlines this year, it’s worth remembering that cyberattacks can target businesses of any size. Over seven in ten small businesses experienced cybercrime in the two years leading up to 2023, equating to around 3.7 million firms. As technology evolves and scammers become more sophisticated, it gets harder and harder to keep up with their tactics, and to defend against their different types of attack. PHISHING ATTACKS The most common form of cybercrime is phishing attacks, where criminals deceive people into giving away sensitive information like passwords or bank details, by pretending to be a trusted organisation through fake emails, texts or websites that look genuine. Of the small businesses that had experienced cybercrime, more than nine in ten (92 percent) said they had been targeted through phishing emails. These are particularly effective in the current climate where there are increasing cost pressures, and users might be more tempted by deals and discounts. Over a third of small firms have faced fraud or attempted fraud, with the most common type being invoice fraud, followed by card fraud and having unauthorised payments taken from their account. All of this costs money, time and reputational damage. A total of 39 per cent of small businesses who fell victim to cybercrime or fraud suffered a financial hit of more than £1,000. STRONGER SUPPORT They shouldn’t have to carry that burden alone. More than half have invested in better cyber defences, but they still need stronger support from the Government. That means properly promoting the National Cyber Security Centre’s Cyber Essentials scheme so that every small firm knows what it is, understands how it can help, and can access it affordably. It means reforming Action Fraud, so that small business owners can have confidence their reports will be taken seriously, investigated rapidly, and lead to real consequences for the criminals behind these digital crimes. And it means making cyber insurance more accessible, because at the moment, too many firms are priced out of cover that could save them from devastating losses. Through FSB Insurance Service, we know there is demand for tailored, affordable cover, but Government support could help more firms access protection. Cybercrime is not going away. If anything, the rise of AI looks set to make scams more convincing and attacks more sophisticated. Small firms need the Government and industry to step up, to stem the toll taken on the UK’s 5.5 million small businesses by this most pernicious and potentially devastating form of crime. It may take place online, at least initially, but the consequences can be all too real. Tina McKenzie, Policy Chair, Federation of Small Businesses (FSB), looks at the risks of cybercrime ONLINE SAFETY ABOUT FSB As the UK’s business support group, FSB is the voice of the UK’s small businesses and the self-employed. Established over 40 years ago to help its members succeed in business, FSB is a non-profit making and non-party political organisation that’s led by its members, for its members. As the UK’s leading business campaigner, FSB is focused on delivering change which supports smaller businesses to grow and succeed. FSB offers members a wide range of vital business services, including access to finance, business banking, legal advice and support along with a powerful voice in Government. Each year FSB also runs the UK’s Celebrating Small Business Awards. More information is available at www.fsb.org.uk. You can follow us on twitter @fsb_policy and on Instagram @fsb_uk.
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