Canadian Underwriter

Use of technology up among small businesses in U.S, concerns over cyber security also on the rise

October 28, 2013   by Canadian Underwriter

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The percentage of small business owners in the United States who are using tools like smartphones and the cloud has increased significantly in just three years, a situation that demonstrates the need to keep on top of cyber security issues and vulnerabilities, suggests survey findings from the National Small Business Association (NSBA).

Cyber Security“In an increasingly technology-reliant global marketplace where cyber security issues and vulnerabilities can bring com­merce to a screeching halt, understanding how small businesses utilize technology is of critical importance not only to policymakers, but to thought leaders in the IT industry,” states a report detailing results of the NSBA 2013 Small Business Technology Survey. The survey, done online from Aug. 14-23, involved 845 small business owners, notes the report, released at the end of September.

Cyber security has proved a concern – and sometimes a reality – for some polled small business owners. In all, 94% of respondent report being very or somewhat concerned about cyber security and almost half have been the victim of an attack.

“These attacks result in significant losses of time and service interruptions, and typically cost these firms thousands of dollars,” notes the report. Among those whose banking accounts were hacked, average losses were about US$6,927.

For those companies that suffered a cyber attack, the effect on the business took the form of a service interruption for 59%; information being falsely sent from company domains or e-mail addresses for 35%; the website being down for 19%; “other” for 19%; sensitive information data being stolen for 5%; and the attack enabling hackers to access business banking account(s) for 3%.

As for the length of time to resolve the issue following the cyber attack, 38% of polled small business owners reported it was less an one day; 40% reported it was one to three days; 11% reported three to seven days; 7% reported more than a week; and 5% reported more than two weeks.

Another vast majority of respondents, 88%, said they would support legislation that strengthens criminal penalties for those who are convicted of online stealing.

Asked how important a concern cyber security is to their respective businesses, 59% of polled small business owners responders said it was very important, 35% said somewhat important and 6% said not at all important.

A vast majority of responding small business owners noted they were either very or somewhat concerned their business could be vulnerable to a cyber attack. Specifically, 30% reported they were very concerned, 60% reported they were somewhat concerned and 11% reported they were not at all concerned.

That said, the level of understanding of cyber security issues and how to handle the online security of their business ranged from 21% of respondents who said they have a high understanding, 52% who have a moderate understanding, 25% who have a low understanding, and 2% who have no understanding at all.

The NSBA 2013 Small Business Technology Survey indicates that, as expected, newer technology platforms such as cloud computing, smartphones, tablets and high-speed Internet options all increased between 2010 and 2013.

TabletUse of desktop increased from 76% in 2010 to 87% in 2013; use of laptops increased from 67% to 84%; and use of smartphones increased from 57% to 74%. Of those surveyed in 2013, 55% were using cellphones, 41% were using tablets and 78% were using landlines.

With regard to cloud computing, the percentage of small firms in the cloud has climbed dramatically from 5% in 2010 to 43% today.

Asked if their respective business has become more of less dependent on the use of technology over the past 12 months, 50% of respondents said more and 49% responded about the same.

That use may be reflective of the perception that technology – and keeping up with new technology – is important to the success of their businesses. In 2013, 70% of respondents reported technology was very important to business success (compared to 65% in 2010); 27% viewed it as somewhat important (compared to 33%); 3% said it was not very important (compared to 2%); and 1% said it was not at all important (compared to zero).

Fewer small business owners are paying for an outside firm to handle IT needs than three years ago. NSBA reports that the decrease is likely driven by two factors: the economic challenges small businesses have faced in the last several years; and improved IT platforms and the growing reliance on, and therefore need to understand, these technology tools and platforms.

Just 27% of respondents report they do not use any social media, almost half of the 53% who reported in 2010 not using social media. Asked what they use social media for, respondents were asked to check all options that apply. The results indicate 85% selected business networking, 48% noted to keep in touch with friends, 14% cited political advocacy and 9% noted “other.”

Asked about the biggest challenges small business owners face with their company’s use of technology, costs of needed upgrades to technology were cited by 44% in 2013 compared to 51% in 2010; security issues were cited by 42% compared to 52%; time it takes to fix problems were cited by 41% compared to 37%; cost of maintaining technology was cited by 36% compared to 49%; breaks in service was cited by 30% compared to 31%; lack of expertise was cited by 26% compared to 26%; response time from external technology support company was cited by 18% compared to 13%; location of business (very rural area) was cited by 9% compared to n/a; and “other” was cited by 7% in 2013 (no percentage for 2010).

Other survey findings include the following:

  • the majority of small firms have a website for their own business, and almost one in five has a mobile website;
  • there was a notable drop in small busi­nesses that accept credit or debit cards as payment and an increase in third-party vendors, likely as a result of increasing worries about cyber security, as well as costs and lack of transparency when it comes to swipe fees; and
  • changes in utilization are at the root of why there was such a notable increase in the number of respondents who report they allow employees to telecommute – from 44% in 2010 to 60% today.