What can your business do to improve cyber security?

01 June 2017

One in five businesses has been a victim of cyber crime in the last year with big business being most vulnerable, according to research.

This is just one of the headline findings in one of two surveys published in April into cyber attacks which conclude that all types of businesses need to ramp up their security defences as cyber crime becomes more prevalent.

Released within a day of each other, the headlines from the British Chamber of Commerce (BCC) Digital Economy Survey 2017 (mainly of SMEs operating in the manufacturing and services sector) and the Department for Culture Media & Sport (DCMS) Cyber security breaches survey 2017 make bleak, but not unexpected, reading.

The surveys questioned 1,285 and 1,523 businesses respectively across the UK, with the following headline findings:

BCC survey

  • 20 per cent of respondents had been hit by a cyber attack in the last 12 months.
  • Large businesses are more likely to be a victim of a cyber attack than their smaller counterparts. 42 per cent of businesses with over 100 staff reported having been hit compared to 18 per cent of smaller businesses with fewer than 99 employees.
  • Only 24 per cent of respondents had cyber security accreditation in place and of those respondents, only 47 per cent were firms with more than 100 employees.
  • 21 per cent believed that the threat of cyber crime was preventing their business from growing.

DCMS survey

  • Nearly half (46 per cent) of all UK businesses surveyed identified a breach or attack in the last 12 months, with the incidence of breach rising to 66 per cent among medium firms (50 - 249 employees) and 68 per cent among large firms (250+ employees).
  • The most common type of breach experienced was staff receiving fraudulent emails (72 per cent) followed by viruses, spyware and malware, people impersonating the organisation in emails or online and ransomware.
  • 57 per cent of those who identified breaches said the breach adversely impacted upon their organisation, for example through being forced to implement new protective measures or having staff time taken up dealing with the breach.
  • 74 per cent of UK businesses said that cyber security is a high priority for their senior management.
  • Three in five businesses (58 per cent) had sought information, advice or guidance on the cyber security threats facing their organisations in the past year from IT consultants, online searches, or Government or public sector sources. Perhaps, disappointingly for Government, few businesses had yet accessed the National Cyber Security Centre which was launched earlier this year and which aims to make cyber security guidance more accessible and easy to use for businesses.
  • 52 per cent of businesses had enacted basic technical controls across the five areas laid out under the Government endorsed Cyber Essentials scheme. However, the survey indicated that few businesses were aware that they could be accredited for having fulfilled all of the requirements of the scheme.
  • 58 per cent of businesses had undertaken action on five or more of the 10 Steps to Cyber Security guidance produced by the National Cyber Security Centre, which outlines the practical steps organisations can take to improve their cyber security.
  • 57 per cent had attempted to identify cyber security risks to their organisations, for example through health checks or risk assessments.
  • However, given the statistics above, the survey also suggests a sizeable proportion of businesses did not have basic protections or had not formalised their approaches to cyber security.
  • 19 per cent were worried about their supplier's cyber security, but only 13 per cent had required suppliers to adhere to specific cyber security standards or good practice.
  • Only around a third (33 per cent) of businesses had a formal policy on cyber security or cyber security risks documented in business continuity plans, internal audits or risk registers.

So why do businesses need to take note?

Well, in the words of Dr Adam Marshall, the Director General of the BCC, "Cyber attacks risk companies' finances, confidence and reputation, with victims reporting not only monetary losses but costs from disruption to their business and productivity".

Protecting customer data; intellectual property; trade secrets; business assets; business continuity; and reputation, and preventing downtime as well as to comply with laws and regulations are also all good reasons for doing so.

If that wasn't enough, the need to take action now is all the more acute given the extension to data protection regulations coming into force in May 2018, with the new General Data Protection Regulation (GDPR)  legislation. As indicated in our previous briefing on the GDPR, the GDPR will increase companies' responsibilities and requirements to protect personal data. Mandatory requirements will be introduced for all organisations processing sensitive data on a large scale or having large scale customer databases, including the need to notify of serious security breaches without undue delay. It will also impose tough penalties for failing to do so - depending on the breach, fines of up to four per cent of global annual turnover for the previous financial year or €20 million, whichever is higher, can be imposed.

In addition, the EU Network and Information Security Directive (NIS Directive) (otherwise known as the Cyber security Directive), which came into force on 8 August 2016, must be implemented by Member States into their national laws by 9 May 2018. The NIS Directive is the first comprehensive piece of EU legislation on cyber security and will impose minimum harmonization rules on EU Member States with the aim of preventing and responding to cyber disruptions and attacks.

Requirements on Member States under the NIS Directive include adopting a national strategy and regulatory measures for operators of essential services (within the energy, transport, banking, financial market infrastructure, health, water production and digital infrastructure sectors) and providers of particular digital services (online marketplaces, online search engines and cloud computing service providers) (DSPs). Such operators and DSPs will be required to adopt appropriate measures to manage security risks and to report incidents above certain thresholds to national competent authorities without undue delay. The Member States must enforce those requirements and put in place "effective, proportionate and dissuasive" penalties for non-compliance. There will be an obligation to share information with other affected Member States where an incident has a significant impact on the continuity of essential services in more than one Member State and provisions regarding when it will be necessary to notify the public.

The NIS Directive is not limited to personal data, as is the GDPR, but potentially covers any type of data breach or incident. A data security incident could therefore trigger notification obligations and penalties under both regulations.

The GDPR will be automatically binding and the cyber security directive implemented prior to the UK ceasing to be a member of the EU. It is also likely that the UK will continue to adopt their provisions and/or fundamentally similar laws post Brexit. Therefore, they cannot be ignored.

What can be done to improve a business' cyber security?

Review and/or refresh existing cyber security policies, procedures and checklists. Do they currently provide a level of security appropriate to the level of the risk? Plan to ensure that appropriate cyber security measures will be in place to ensure compliance with the GDPR, and also the NIS Directive if relevant, including notifying security incidents. Put in place a breach team and train them to respond to incidents.

Raise awareness and train staff. According to the DCMS survey, the most common types of breaches can be linked to human factors, such as unwittingly clicking on a malicious link. Staff awareness and vigilance are essential to a business' cyber security alongside any technical and software protections. Raising awareness and education across all staff - not just specialist IT staff - is essential.

Engage senior management. Again, the DCMS survey indicates that where designated senior management is engaged then businesses tend to treat cyber security as a higher priority than average.

Consider cyber security risks outside the business. Although many businesses may have concerns about suppliers' cyber security, the surveys suggest too few do anything about it. Insist on your suppliers adhering to specific cyber security standards or codes of good practice. By suppliers doing so, it demonstrates their reliability to their business clients and their understanding of the need to protect their client's interests.

Take a look at our digital risk calculator to find out if cybersecurity is one of your business' top five digital risks, and calculate your overall digital risk rating.

NOT LEGAL ADVICE. Information made available on this website in any form is for information purposes only. It is not, and should not be taken as, legal advice. You should not rely on, or take or fail to take any action based upon this information. Never disregard professional legal advice or delay in seeking legal advice because of something you have read on this website. Gowling WLG professionals will be pleased to discuss resolutions to specific legal concerns you may have.