News in brief: data risks, stress, interest rates, IP

News in brief
News in brief

Accidental data leaks pose higher risk than cyber attacks

Accidental data leaks via outgoing emails pose a higher security risk to businesses than inbound malicious attacks, according to a report from IT solutions and managed services provider Mimecast.

The survey, which was conducted among a mix of large businesses and SMEs, found that 28% of respondents cited human error as the biggest threat to corporate email security. External threats such as ‘spear phishing’ and gateway attacks were considered a much lower threat, along with the risk of respondent’s partners or extended supply chains exposing corporate email vulnerabilities.

While human activity is the greatest concern, one in five of businesses surveyed were also worried about the increased use of portable devices such as smart phones and tablets on the corporate network, particularly given the increase in bring-your-own-device usage. Other key concerns included the use of external hardware such as USB sticks, with 17% of respondents acknowledging this as an issue. Mimecast cyber security strategist Orlando Scott-Cowlet said: “If company guidelines are too complex, many employees will simply find their own solution, potentially opening up the organisation to attack.”

Fewer businesses are struggling, but the picture is less clear for SMEs

Only 17% of businesses reported significant levels of distress in December, according to insolvency trade body R3, which describes this as a record low.

When the survey began in March 2012, the figure stood at 64%. At the time of the last survey, September 2015, the figure stood at 28%, and the previous record low was 24%, as reported in April 2015. The trend towards decreasing stress levels is potentially very encouraging.

However, according to Whittingham Riddell tax partner Duncan Montgomery, despite this being the overall trend, there are still indications that SMEs and particularly micro-SMEs are showing fewer signs of growth.

Montgomery said: “What we are frequently seeing in the SME sector is businesses that have grown, but are coming up against the limits of some of their historic systems; these need a refresh to streamline activity for new levels of volume.”

ReesRussell partner Jonathan Russell commented: “It is pleasing to see reports that show fewer businesses in distress and certainly the last ten years of lack of finance for small businesses has made them either pack up or become more resilient.

“The worry is that whilst I see fewer micro businesses with money worries, the picture is not as good with the larger small businesses that are more reliant upon national and international trade and dealing with the major companies and organisations.”

Bank of England interest rates hold steady at 0.5%

The Bank of England has announced that the Monetary Policy Committee has voted eight-to-one to keep interest rates at a historic low of 0.5%, it has been reported.

Commenting on the news from the perspective of the small business community and alternative finance providers, MarketInvoice CEO and founder Anil Stocker said even if the rate had risen, levels for savers are still too low and are likely to remain so for the next decade.

“However,” said Stocker, “savvy savers are reaping the returns elsewhere why should they give the bank their hard earned money for nothing in return - when the same money could be put to better use elsewhere? One example of this is the boom in peer-to-peer lending, which has seen solid returns throughout the last five years.”

The alternative finance sector has certainly become increasingly important for SMEs over the past few years. As reported earlier in the week, the big four banking groups – Lloyds Banking Group, Royal Bank of Scotland, Barclays and HSBC – control 85% of the SME market, yet customer satisfaction remains low. Only 26% of SMEs said they would recommend their bank to others – however, this is up from 23% in 2014.

SMEs should brush up on IP law before setting up online

Social media platforms are experiencing exponential growth, with 72% of UK internet users now having a social media profile in 2015 according to Ofcom research. Naturally firms of all sizes want to make the most of this, yet starting up online can be full of legal pitfalls for unwary SMEs, according to law firm Azright’s intellectual property expert Shireen Smith.

Smith explains: “Firms may want to interface with other sites in order to access media. This involves knowing about your legal position when using an Application Programming Interface, or API for short. Put simply, an API is a language a programmer can use to talk to a system.” Smith claims that, as the law is constantly evolving and the web design and development industry is unregulated, it is sometimes beneficial to seek professional advice.

In addition, ‘tropicalisation’ is an occurrence that has been significant in China and Brazil. The term refers to the practice of investing in start-ups that take an established business model and adapt it to an emerging market – a feat that is easily achievable in today’s digital economy.

Examples include Peixe Urbano, a Brazilian clone of ‘daily deal’ site Groupon, Weibo, the Chinese Twitter-like microblogging platform, RenRen the Chinese version of Facebook, Baidu, the Chinese take on Google and Alibaba, which is a Chinese copy of eBay.

“From an IP perspective there are few legal barriers to this tactic. The law does not protect bare business models. Elements of a business model might be protected. A patent can sometimes protect the technology, copyright can protect the expression of a concept, designs can protect the aesthetic aspects and trademarks protect business and product names,” warns Smith.

Smith sums up by saying: “Securing a range of intellectual property rights in different elements can combine to provide the most powerful protection as each IP right protects you in subtly different ways and situations."

MP claims Derby is the best city for a start-up

The vital contribution that smaller businesses make to the UK should not be overlooked. this was the message from Derby North MP Amanda Solloway in her recent article for the Derby Telegraph.

Solloway said that the “figures speak for themselves,” citing the fact that in Derbyshire and Nottinghamshire companies with 20 or fewer employees make up 90% of all businesses and that SMEs employ more than 15.5 million people around the UK.

Her hope is to drive growth and support for small businesses in Derby, which she claims came top in a recent study for the best cities in the UK to start a business, having been assessed on core criteria such as public transport, access to broadband, start-up finances available and quality of life.

However, she concedes that there is still room for improvement and pledged to raise with the government such concerns as access to training and funding.