A survey of small and medium enterprises (SMEs) in Hong Kong and Singapore by Chubb has revealed a significant perception gap in cyber awareness among SMEs in both markets and how well they are prepared to deal with the risk.
Majority of respondents (52% in Hong Kong and 63% in Singapore) believe that they are less vulnerable to cyberattacks than larger companies. However, majority of SMEs (71% in Hong Kong and 56% in Singapore) also encountered a cyber incident in the past 12 months.
Most of the cyber incidents that occurred in the past year were due to internal factors, such as data loss through system malfunction or technical fault, business interruption from system malfunction or technical fault, and human error causing business interruption or data loss.
The study, titled ‘Too Small to Fail? Chubb SME Cyber Preparedness Survey’, interviewed leadership figures from 300 SMEs in Hong Kong and 300 in Singapore. The respondents came from an assortment of industries such as professional services, manufacturing, retail and hospitality, financial services, technology, and others.
“Many SMEs believe they are too small to be targeted by cyber criminals or that internal issues will not greatly impact them. They think they are too small to fail. However, our own claims data highlights numerous small business compromises that are decimating the cash flow of small businesses,” said Andrew Taylor, cyber underwriting manager at Chubb Asia-Pacific.
“In fact, smaller companies have a relatively larger exposure, as they face the same threats as larger businesses but do not have the means to implement comprehensive protection, leaving significant risk uncovered.”
The study suggested that SMEs in both markets may be overconfident in assessing their ability to overcome cyber breaches. More than seven in 10 (77% in Hong Kong and 72% in Singapore) believe they can overcome a cyber event, with more than half believing they can do it within 12 hours.
However, other findings seem to indicate otherwise – 52% of Hong Kong respondents and 66% of Singapore respondents said that they are not aware of all the cyber threats they face. Furthermore, 21% of Hong Kong SMEs and 32% of Singapore SMEs who encountered cyber incidents did not know which data files were affected.
Aside from the lack of understanding of cyber risks, SMEs in the two major Asian markets are lacking in steps taken to protect themselves. More than half (53% in Hong Kong and 70% in Singapore) of surveyed firms have never purchased cyber insurance.
“Clearly, there is a need for more education about the value of cyber insurance among SMEs. This is why we place a strong emphasis on our preventive advice as well as response support,” said Tim Stapleton, senior vice president, cyber & technology, Chubb Overseas General.
