Firms warned of "false economy" security cuts risk
Commercial insurance
28th June 2010
It may place business operations at risk if companies cut back their spending on security in order to reduce expenditure in the wake of the recession, one expert has suggested.
This warning was issued by external affairs director of Equifax Neil Munroe, who said such moves could be "a false economy" for organisations, as there is a greater temptation for people within companies to commit data-related crimes during periods of economic uncertainty.
"What we see, generally, is that in times of financial stress this type of activity - fraud, and various other types of security issues around that - increases," he explained, something that may interest insurance for business customers.
Mr Munroe was commenting after recent research from ABM showed although half of respondents have seen higher levels of theft and fraud in the past two years, 29 per cent have cut security budgets over the same timeframe.
According to the Equifax specialist, downsize resources in this area is a "very short-term view" and leaves operations exposed at a time when they need to increase protection.
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