SMEs: Are you investing in the right expertise for sustainable growth?

Mon Jul 31 2017

Cyber attacks are on the rise and for 44% of SMEs, this is a bigger worry than Brexit1.

In some ways, that’s not a surprising stat. After all, the potential devastation of cyber-attacks is pretty clear and well documented in the press - think the NHS ransomware story - while the impact of Brexit is still largely unknown. But SMEs aren’t burying their heads in the sand about cyber-attacks; they’re spending £2.9bn on external cyber security experts, according to Barclaycard researchii. As a small business owner, are you investing in the right areas?


The figures suggest that businesses are realising the value of experts, with SMEs investing £3bn in cutting-edge website development and a similar amount on payment innovation (£2.9bn). And the reasons for investing seem to be less about time and more about a lack of skills in house. But 12% of those not investing in cyber security, for example, are refraining from doing so because they don’t think they can afford to protect their business. One in 10 is spending the bare minimum.

It’s a confusing picture, with the only real clarity being that businesses are looking for ways to future-proof infrastructure but are struggling to reconcile multiple demands on budgets. If this sounds like you, then you’re not alone.

There’s increased pressure on business owners to be, or employ, experts not just in the product, service or experience you offer consumers, but also in fraud and security, IT, marketing, payment technology and more. And this shift and pressure seems to be driven by changes in consumer behaviour and expectation.

Seen, tapped, delivered

Consumers want to be able to browse, buy, pay for, receive and return goods however and whenever they want.  And their wish is our command. This quest to offer seamless, omnichannel shopping experiences is progress.

We see these steps forward manifest themselves in retail apps, click and collect, contactless payments and much more. But these developments also pose risks. They mean many more touchpoints – places at which consumers engage with brands, and possibly input their personal and payments data. Each touchpoint is a potential weak spot at risk of cyber-attack, at risk of hacking and fraud. And this means a huge increase in the need for specialist expertise in roles specifically created to combat and prevent such increasing threat levels.

For the first time, the annual Crime Survey for England and Wales included fraud and computer misuse statistics. It found that from September 2015 to September 2016, there were estimated to have been 3.6m cases of fraud and 2m computer misuse offencesiii. Figures from the survey show that these are now the most commonly experienced offences, more so than car theft and burglary, which usually top the charts.

So, how can we close an alarming skills gap?

A recent study highlighted the fact that specialist expertise in cyber security and fraud prevention is severely lacking in the UK.  The research, conducted by job site Indeed, showed that the UK is the facing the biggest skills gap of any country in the world, except Israel. The revelation came as the same research found that the number of people in the UK looking for jobs in cyber security amounted to just 31.6% of the jobs advertised in that space. Israel sat at 28.4%, with the US and Canada doing much better, at 66.7% and 68.1% respectivelyiv.

Things this side of the pond seem grim, but it’s not all bad news. There are big plans in place to close the skills gap, with the existence of initiatives like the Cyber Security Challenge UK  . It’s a project set up to run a series of competitions to test cyber skills and find the next generation of cyber defenders. Charles White is a board advisor for the initiative, which, he says is ‘absolutely crucial in the mission to get more people trained up in the skills needed to tackle cybercrime’.

“While organisations work to rapidly train up cyber security experts in the background, brands big and small need to invest in partnerships with businesses that can add value in more than one area.”


Charles White
Founder and CEO, IRM & Board Advisor for Cyber Security Challenge UK.

Large organisations have long been investing in this area, too, understanding the multiple roles they have to play for many of their clients. Barclaycard, for example, doesn’t offer innovative payment solutions in isolation, to businesses. With these payment solutions comes an obligation to comply with regulations like PSD2, PCI DSS and GDPR . Not only this, but they offer support for businesses on driving growth through payment technology, while staying the right side of fraud prevention.

“We can’t tackle cybercrime without cyber security experts, that’s a fact. So for all businesses, big and small, it’s about finding ways to access that expertise, whatever your budget. For SMEs the solution might be to seek out value in existing or new partnerships, like built in security and fraud protection from your payment gateway provider.”


David Jeffrey
Director, Head of Product - Fraud and Security at Barclaycard Payment Solutions

Businesses are facing tough times and tough decisions, then. They need to protect themselves and customers from cyber threats and fraud, but do so on budgets stretched thinly between all the elements that make up a successful, safe and secure brand. For more than a third (34%) of the UK’s SMEs, managing multiple demands as their business grows is a struggle. 14% are worried that an inability to manage these might cause them to fall behind the competition, yet 67% are concerned that they don’t have enough money to invest in the right expertisev.

But the idea that you have to invest to accelerate is on the money here. While there’s clearly a struggle when it comes to recruiting the right skills for today’s business world, there are organisations employing teams of people with exactly these skills, offering consultancy to clients. It seems investing in expertise this way, rather than bringing people in house or working with multiple partners, is the route many businesses are taking.

Invest to accelerate

Businesses are investing more in external expertise now than they did five years ago:

External Support

Spent more compared to last year 

Spent more compared to 5 years ago

Intend to spend more next year

Intend to spend more now than in the next 5 years

Accounting

23%

37%

27%

35%

Cyber security

33%

46%

35%

42%

IT infrastructure

36%

46%

36%

46%

Fraud prevention 

27%

38%

32%

37%

Website development 

39%

48%

41%

46%

Of those areas, the highest amount spent on external expertise was on IT infrastructure (£31,700). It seems then that while not all businesses can afford to spend on security and fraud expertise, or those that can aren’t planning to increase investment in these areas in the next year, they’re hoping to cover a few bases by investing in one or two key areas. And it’s paying off. A fifth (20%) of those businesses that invested in support for their payment systems noticed an increase in transactionsvi.

Safety in numbers

Cyber criminals often target the weak, seeking out easy routes to ill-gotten gains. So even if your security and fraud prevention measures are not perfect (none are), the advice is to make sure they’re at least better than your competitors’. Sharon Manikon, Managing Director, Customer Solutions at Barclaycard, believes the secret to this lies in picking partners who can offer the mix of products and support.

Sharon Manikon

“The UK’s small businesses face immense pressure to keep up with larger competitors, who often have bigger budgets and greater access to expertise. The business landscape is constantly changing, so it’s important for SMEs to have access to the tools and products to future-proof their business, and support to drive it forward.”


Sharon Manikon
Managing Director – Customer Solutions at Barclaycard

Partnering with experts makes sense for businesses of all sizes, after all, we’re stronger together. For SMEs, it’s about access to the right expertise and to the advice and consultancy that comes from working with an established brand. Surrounding yourself with experts could be a good way to grow your business and minimise some of the risks that can come with running a business. It’s about always looking for the value any of your partners can add that span some of the key areas of business growth:

  • Cyber security
  • Payment system management
  • Research and data insights
  • Fraud prevention
  • Website and app development
  • Business strategy
  • Accountancy

Are you part of the future-proofing set?

SMEs across the UK are seeing the value of experts. What plans do you have to grow your business with the help and support of experts across business?

Top 5 areas of expertise SMEs are planning to invest in over the next 12 months

Percentage of SMEs intending to increase investment

Website development

33%

App development

33%

Cyber security

32%

Research and data insights

32%

Fraud prevention

27%

It might be all too tempting to invest in expertise now – for example in fraud prevention measures – then sit back and think the hard work is done. But as threats develop and attacks become more sophisticated, it’s critical to invest now and continue to invest into the future.

Speak to us today to find out how we can help your business - 0800 096 8237

Or, why not use our online product selector tool help find the right payment solution for your business.

Barclaycard research: Online interviews were carried out with 1,000 senior decision makers (500 from SMEs and 500 from large companies) by Opinium research from 2nd – 9th June 2017.

ii Barclaycard research: Online interviews were carried out with 1,000 senior decision makers (500 from SMEs and 500 from large companies) by Opinium research from 2nd – 9th June 2017.

iii Quoted here: http://www.bbc.co.uk/news/uk-38675683  (Jan 2017)

iv All stats in this paragraph from: http://www.independent.co.uk/news/business/news/cyber-security-skills-gap-widen-supply-demand-expertise-uk-companies-it-a7529986.html  (Jan 2017)

v All stats in this paragraph from: Barclaycard research: Online interviews were carried out with 1,000 senior decision makers (500 from SMEs and 500 from large companies) by Opinium research from 2nd – 9th June 2017.

vi All stats in this paragraph from: Barclaycard research: Online interviews were carried out with 1,000 senior decision makers (500 from SMEs and 500 from large companies) by Opinium research from 2nd – 9th June 2017.

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