Almost a third of consumers have said that a small business would lose their loyalty in the event of a data breach, a new study finds.
While no business is free from the risk of cyber-crime, larger organisations are usually more able to deal with data breach incidents, as they typically have greater finances, IT resources and expertise to invest into cyber-combat and breach recovery.
On the flip-side, smaller companies face tougher times in the event of a leak, but they also face losing customers, according to findings made by Bank of America Merchant Services.
Following a poll of consumers and small businesses, Bank of America Merchant Service’s third-annual Small Business Payments Spotlight report discovered that over a fifth (21%) of small-to-medium-sized businesses (SMBs) said they suffered data breach over the past two years – a rise of 17% on the previous 24 months.
Over two fifths (41%) of small companies said that they were hit by a breach incident, recovery from which cost in excess of $50,000. Furthermore, nearly 30% of consumers polled said that they would not go back to a small business that had been hit by a data breach – the number is up 20% on the result from two years ago.
Small enterprises have been taking steps to mitigate data breach risk over the past 24 months, with 57% saying that they have upgraded their Point-of-Sale (POS) equipment, and 44% reporting that they have integrated US industry security standards such as PCI compliance.
A further 43% of small firms said they have given staff more training with regards to cyber-security and spotting fraud. EMV chip cards have now been taken on by 80% of SMBs – the technology offers a more secure method than the payment cards with a magnetic strip.
POS systems have also become more sophisticated, an evolution that is helping SMBs in sales reporting and inventory management, the study found. Around 60% of the respondents reported that they employ a POS system that can do more than supporting payments, while just 35% said they are using systems that do not have integrated POS.
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