Growing risk of online crime threatens London's business reputation

Wednesday 10 September 2014

 

Growing risk of online crime threatens London's business reputation

The capital's reputation as a safe place to do business is under threat unless firms becomes more prepared against the rising threat of online crime.

A new report from London Chamber of Commerce and Industry (LCCI) argues that despite efforts from government and law enforcement, London firms - particularly small and medium-sized enterprises (SMEs) - are still largely oblivious to the ever-more sophisticated methods cyber criminals are using to steal valuable information.

Cyber crime costs UK companies alone at least £21bn a year and the costs of a security breach experienced by a smaller company are rising with the average costs of the worst attack now £65,000 to £115,000, up from £35,000 to £65,000 a year ago.

The report - Cyber secure: making London business safe against online crime - found that:

Over 50 per cent of London firms had experienced a cyber breach

Cyber crime numbers and costs could be far higher due to widespread under-reporting of online fraud to Action Fraud

A lack of awareness of cyber threats and the high costs of protection remaining significant barriers to firms implementing stronger security measures

Smaller firms are becoming increasingly targeted by cyber criminals as their systems are generally easier to access and they provide an open door to larger companies via supply chains

Government initiatives to improve awareness and resilience, and to reduce the costs of security are welcome, but often use overly complex, technical language which renders them inaccessible to the average SME

LCCI calls on the Government to create a single 'landing pad' of cyber security resources aimed a business, making it simpler for companies to know where to go for advice. The Mayor of London can complement this resource for the capital's firms through the proposed London Business Resilience Centre.

Despite the Government's designation of Action Fraud as the first point of contact for cyber crime victims, many businesses are not aware of the service's existence. Minimising the information required from companies and better promotion would help increase reporting rates for vital intelligence.

More also needs to be done to make it easier for firms to recover the costs of cyber crime, especially those perpetrated in the UK. The Government should encourage internet service providers (ISP) and banks to use the cover of existing laws to release data that could result in faster and more decisive action taken against criminals. Some simple guidance to help firms navigate the civil or criminal legal system would also help.

Colin Stanbridge, Chief Executive of LCCI said: "The growing menace of cyber crime is costing business dear in financial, data and intellectual property loss.

"SMEs often have very limited resources that can allocate to cyber security so the Government and Mayor of London must be more targeted in their approach to reaching smaller firms with helpful information, and focus on providing east-to-adopt online security solutions

"Unless more is done to help smaller firms understand and put in place at least basic security measures, the reputation of London as a major global centre for business is vulnerable.

"The authorities need to work together to make the process of online protection simpler, quicker, easier and cheaper for the smaller firm, so the health of the economy and the reputation of the capital is not undermined".

Deputy Mayor of London for Policing and Crime, Stephen Greenhalgh, said: "The advance of technology has shifted criminal activity from the street to the PC.  The LCCI cyber security report paints a picture of a strong will from Government and law enforcement to protect businesses, but a confused landscape in terms of fragmented initiatives and policy responses.

"This report should galvanise the effort and make this confusing landscape easier for the business owner to navigate, from the online SME to the multinational.  MOPAC looks forward to working with LCCI to raise awareness and simplify the plethora of initiatives out there, particularly for SMEs, through single hubs like the London Business Crime Resilience Centre."

City of London Police Commander, Steve Head, who is also the Police National Coordinator for Economic Crime, said: "Cyber crime is estimated to be costing UK companies at least £21 billion a year but the reality is this huge figure would be even higher if all businesses reported to authorities when they had fallen victim to an offense committed through the internet or via other emerging technologies.

"It is therefore vitally important that SMEs who fall victim to an online crime contact Action Fraud, which in May became part of the City of London Police and now sits directly alongside the force's National Fraud Intelligence Bureau (NFIB). Working together they are improving the service provided to small companies whose security has been breached by cyber-criminals with, most importantly, the arrival of bulk reporting for industry just around the corner.

"The past year has also seen a significant rise in crime disseminations to UK forces for investigation and a huge rise in the disruption of criminal enablers. But only by having the full picture of how cyber crime is targeting industry can law enforcement and government put in place the resources and measures required to combat what has a quickly become a massive threat to the sustainability and profitability of companies operating up and down the land."

ENDS

Media contact:       
Simon Whalley
T: +44 (0)20 7203 1897                 
M: +44 (0)7827 241528
E: swhalley@londonchamber.co.uk

NOTES TO EDITOR:

  1. London Chamber of Commerce and Industry (LCCI) is the capital's largest and most representative business organisation, with members ranging in size from multi-national companies to SMEs and sole traders.
  2. Colin Stanbridge, LCCI Chief Executive, is available for further comment and interview.
  3. The full report is available here: Cyber Secure: making London business safe against online crime