Cyber attacks are costing some manufacturing businesses hundreds of thousands of pounds per year, new research by commercial insurer NFU Mutual has found, with the vast majority of those within the sector admitting to having fallen victim to this type of crime.
With high-profile cyber-attacks targeting the likes of Network Rail and TfL hitting the headlines in recent weeks, the issue is well known to businesses and manufacturing industry bodies, and goes beyond just financial loss.
“The cost of this can not only be measured in pounds sterling, but it can cost a lot more in lost reputation,” says Paul Morris, IT Manager at David Salisbury Joinery.
New research* from NFU Mutual highlights the problem many in the sector are facing. The survey shows almost eight in 10 manufacturers (78%) said they had been impacted by cyber-crime at one time or another.
Malware or viruses was the most common issue to impact manufacturers, with more than a third surveyed having fallen victim (39%). Phishing scams (31%), customer fraud (25%), data theft, breaches and leaks (24%), and ransomware (24%) also featured high in the list.
As manufacturing businesses continue to evolve into the digital world, more than nine in 10 of those surveyed said they had to resort to taking security measures to combat cyber-crime in the last 12 months – with three-quarters increasing IT security and 58% having undertaken training around online safety.
David Salisbury Joinery, a designer and manufacturer of orangeries, conservatories and luxury kitchens based in Highbridge, is one of many in the industry well aware of the ongoing threat, as IT Manager Paul explains.
“We have always taken cyber security very seriously,” he said. “I’ve been in post for 15 years and it was even on the business’ radar long before I become involved in ICT support.
“The threat of cyber crime affects all of us, not just the manufacturing sector. We are all aware of what happens when ‘Big-Tech’ stops working for any reason, and David Salisbury is no different.
“If we lose ICT provision the cost could run into many thousands of pounds – and the reputational impact could be enormous.”
NFU Mutual’s research shows just how expensive cyber crime can be to businesses. Nearly a fifth of those surveyed (18%) said, within the last 12 months, cyber crime had cost them between £100,000 and £200,000. A further 16% said the issue had cost between £50,000 and £100,000 in the same time period.
In the modern world of technology, manufacturers have a number of challenges to adapt their ways of working with machinery, products and customers – with a lot of that now being online or in a digital format. That has prompted advice from NFU Mutual for businesses to remain vigilant.
James Trevis, cyber expert at NFU Mutual, said: “Manufacturers are increasingly reliant on digital solutions to operate effectively. This includes a rise in the use of connected devices, operational technology (OT) and design software. Outages affecting these assets can really hurt company trading.
“However, it’s important to appreciate manufacturers are collecting, storing and processing a lot more data than ever. Everything from their own intellectual property to their employees’ personal information could be valuable to a cyber criminal. In addition, with more manufacturers having to evidence safety, compliance or conformity data to their customers or regulators, there is a real risk to the business if this information is lost.
“It’s therefore unsurprising to see our research show – of those surveyed – almost two-thirds of manufacturers felt cyber-crime had increased in the last 12 months.”
MAKE UK, the manufacturers’ organisation that represents the issues most important to its members, is also well aware of the issue at hand.
“UK manufacturers are facing an increasing array of cybersecurity threats, ranging from human error to advanced, targeted attacks,” they said. “NFU Mutual’s research highlights the growing threat of cyberattacks, serving as a timely reminder of the need to invest in robust cybersecurity measures to safeguard business operations.
“Key cybersecurity tips, such as raising employee awareness, regular system updates, and multi-factor authentication, can offer valuable protection for manufacturers. While cost can be a hurdle for businesses seeking to strengthen their defences, the increasing reliance on advanced technology makes cybersecurity an urgent priority.
“Ignoring this issue is no longer an option. Although awareness is improving across the sector, much progress is still needed to protect against these evolving risks.”
James added: “Seeing a rise in the number reporting that they have taken out cyber insurance in the last 12 months was pleasing as it shows manufacturers are starting to consider risks to their digital assets more in the same way as their physical ones.
“We would urge business to continue to protect themselves and take simple, but effective, steps to keep out online criminals.
“This should include periodic cyber risk assessments and implementation of key controls such as Multifactor Authentication on all user accounts, regularly patched software and secure tested back-ups.”
Find out more about NFU Mutual’s cyber insurance: https://www.nfumutual.co.uk/business-cyber-insurance/
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