Technology has the potential to give Canadian SMEs a leg-up, but, the flip side of increased digitization is increased risk. According to the Board’s scale-up arm, The World Trade Centre Toronto, small and medium-sized businesses across Canada are not only lagging peer jurisdictions and large-scale organizations in technology adoption, but those who are advancing their technology capabilities are behind in protecting themselves from cybercrime.
There has been a concerning rise in cybercrimes targeting Canadian businesses, and Toronto’s small businesses are underprepared. The World Trade Centre Toronto’s Digital Needs Assessment (DNA) Survey, revealed that Toronto’s SMEs are behind in their investments of digital tools across the board, and concerningly they’re not investing in data security.
According to Cybersecurity Ventures, the cost of cybercrime is projected to hit an annual $10.5 trillion by 2025 with most of the cost being borne by businesses. In 2021, 41% of small businesses reported that attacks cost them at least $100,000, a costly and potentially preventable expense that is being overlooked in the planning budgets for many SMEs.
Cyber-attacks are already a major threat. A 2022 survey by the Canadian Federation of Independent Business (CFIB) found that nearly half of small businesses (45%) have experienced a random cyberattack in the past year, and 27% experienced a targeted attack.
In their 2021 report, the Insurance Bureau of Canada revealed, 47% of Canadian small businesses surveyed say they do not allocate any portion of their annual operating budget to cyber security. Investing in data security is not just about business efficiency, it is about reducing the significant reputational and financial risks that come with falling victim to cybercrimes like ransomware attacks, data leaks and other forms of cyberattacks.
As cybersecurity and data protection emerges as a priority for potential partners and consumers, small businesses need to improve their capabilities in that area or risk losing out on business. To gain trust in the market, cybersecurity and data protection policies must be put in place and communicated effectively.
This is not easy: Small businesses are forced to balance many competing priorities when it comes to how to spend their resources and many have largely deemphasized cybersecurity due to misconceptions that cybersecurity investments are costly and complicated. However, as SMEs ramp up their digital efforts, they create new vulnerabilities and opportunities for cyber-attacks that need to be addressed.
The lesson is twofold – as SME’s ramp up their digital efforts to stay ahead, online safety should be baked into digital infrastructure from the very beginning. That means improving digital literacy, developing cybersecurity strategies, and investing in affordable tools. Canadian small businesses are already behind the curve when it comes to digital investments, but as they fight to remain competitive in the global market, an ounce of prevention today could mean years of digitally-driven success tomorrow.
The reality is that lack of secure digital infrastructure and supporting processes may in many cases disqualify SMB’s from potential partnerships and sales. So rather than thinking of cybersecurity as just an expense, think of the customers and partners you have – and what their perspective on cybersecurity is, and make sure you are at least putting the same emphasis as they are on keeping your business and data safe.
The World Trade Centre Toronto (WTC-T) is the trade services and business growth division of the Board. Its goal is to deliver best-in-class programs to help businesses build strategies and enhance their trade and growth plans. The Digital Needs Assessment (DNA) offered by the World Trade Centre Toronto was an extensive online evaluation designed to identify the digital capabilities and gaps within participating businesses.
