News in brief: insurance, social media, cyber attacks, FinTech

Are you covered?
Are you covered?


SMEs risk financial shortfall without proper insurance cover

New research from small business insurer Direct Line for Business reveals that only a third of the UK’s 5.2 million SMEs currently have Professional Indemnity insurance (PII). Not all SMEs will require PII cover, but those that do could find themselves uninsured should their clients suffer a financial loss as a result of negligent or poor advice.

Despite the number of SMEs taking out PII growing by 14% last year, not including sole traders, there was a significant fall in the number of micro (-15%) and small (-6%) businesses taking out such policies. Direct Line for Business warns that this is a dangerous prospect because businesses risk financial ruin without the appropriate PII cover.


SMEs are not making the most of social media

According to research by small business consultancy Deal With The Media, social media practices are a waste of time and money for most small businesses. Nearly two-thirds of SMEs fail to benefit through promotion on digital channels such as Twitter, Facebook, Instagram and LinkedIn.

Key findings from a poll of SMEs include: nearly two-thirds (61.6%) were uncertain, disagreed or strongly disagreed that social media marketing had been effective for their business; just under half (43%) were uncertain of its effectiveness; and less than a third (30%) thought it had been effective.

“At the moment social media isn’t working for the majority of small businesses,” said Deal With The Media founder Pete Walter. “Most of the UK’s five million SMEs spend between six and ten hours a week marketing themselves via social media, making their businesses feel modern, digital and connected to their customers.

“The unfortunate reality is most of are wasting time and money in doing so. Collectively, all that time spent tweeting and updating various sites adds up to more than one billion man-hours a year – or the combined workload of more than 520,000 full-time employees.”

Free guide to help mitigate the risk of cyber attacks

Cyber attacks are a growing concern for SMEs as they lack the resources and expertise needed to combat them. According to a recent report by PWC, a hack or breach can cost smaller firms between £65,000 and £115,000 per breach, with the worst affected organisations suffering up to six breaches a year.

AlienVault has published a free guide for SMEs to help tackle the dangers of cyber attacks. The guide outlines the six key phases of an incident response plan: preparation, identification, containment, eradication, recovery and lessons learnt. It describes the different types of security incidents and the relevant response strategies, as well as explaining how attacks typically progress by demonstrating the different stages of the ‘cyber kill chain’.

Canary Wharf is home to the most FinTech start-ups

Canary Wharf is now home to London’s most concentrated cluster of FinTech (financial technology) start-ups, according to new analysis by real estate consultancy BBRE Group. The E14 postcode houses 13 of the 140 companies recently set up to develop and provide financial technology in London, many of these inside the Canary Wharf incubator Level39.

The second-largest cluster is found on the South Bank in SE1, where 11 companies have grouped together. The area benefits from attractive rents, amenable to tech start-ups, but remains close to London’s financial roots in the City.

Head of CBRE CreativeLondon Dan Hanmer, commented: “Canary Wharf has been an ideal home for FinTech start-ups hoping to stand on the shoulders of the financial giants in the area, especially for the ‘facilitators’ that play a supportive role for well established firms in the sector. There are similarly thousands of innovative businesses springing up around Old Street’s Tech City, so it’s little surprise to see three of the top five FinTech clusters in this area.”


SMEs slow hiring processes because of the new National Living Wage

Following the announcement of a new National Living Wage for the over-25s, a survey of employers has found that significant numbers of small firms are concerned about the impact the new wage rate will have on their businesses. Many are planning to slow job creation, raise prices or postpone or cancel planned investments to compensate for the higher statutory rate.

The research by the Federation of Small Businesses found well over a third of small employers expect the new National Living Wage of £7.20 an hour to impact their business negatively when it comes into force in April 2016. When asked to consider the projected rise in the National Living Wage to at least £9 an hour by 2020, 54% said it will have a negative impact. Just 6% of businesses thought the policy would have a positive impact on their business when it is implemented next April.

Study finds ‘older workers’ are highly valued

A study from job site CV-Library reveals that the majority of UK professionals believe older workers make a valuable contribution to UK businesses. Yet despite this, many struggle to find new employment.

The site conducted research among a cross-section of more than 2,400 UK employees aged between 18-70+ to ascertain how they felt about mature professionals in the workplace. The findings revealed an overwhelming sense of respect.

Key figures from the report include: 92.2% of workers believe older workers make a valuable contribution to UK businesses; 76.6% of staff believe that older workers bring years of experience and knowledge to an organisation that can’t be found in a younger worker; 92.7% of workers believe mature staff should still be able to excel in the workplace and almost half of professionals (48.5%) only consider someone to be an older worker once they are 60+.