Do They Understand the Cyber and Financial Risks?
At least one-third of U.S. small and medium-sized businesses accept cryptocurrency as payment for goods and services, a survey released today by HSB, part of Munich Re, has found, with newer companies up to twice as likely to trade in digital credits.
The HSB nationwide survey conducted by Zogby Analytics showed that 36 percent of the small and mid-sized businesses accepted cryptocurrency, while 59 percent of those companies purchased digital currency for their own use as well.
The business responses were divided by how long they had been operating: 47 percent of companies accepting cryptocurrency had been in business five years or less, compared to only 21 percent in business more than 20 years.
Although the benefits of cryptocurrency can include lower processing fees and faster payments, the risks may increase for cyber fraud and computer attacks, said Timothy Zeilman, vice president for HSB, a leading provider of cyber insurance and services.
"Cyber criminals follow the money and fraud can be a serious problem," he said. "A number of currency exchanges have been hacked or embezzled and millions of dollars were lost. Smaller businesses, especially those starting out, can’t afford to be cheated."
Cyber thieves target small businesses with many schemes, he said, from sophisticated computer attacks to malware infections spread through simple phishing emails.
Smaller businesses also may be targeted by hackers, who infiltrate a company’s data system and divert computing power to record and verify cryptocurrency transactions.
Since digital currency exchanges bypass the banking system, trade globally and operate with little regulation, a small business owner may have nowhere to turn when fraud losses occur.
"Small business owners should learn all they can about the technology before accepting cryptocurrency," said Zeilman. "And make sure they have strong data security and insurance to protect against cyber fraud and financial loss."
Survey Methodology: Zogby Analytics was commissioned by HSB to conduct a survey in October 2019 of 505 small to medium-sized businesses across the United States. Seventy-five percent of the sample had annual revenue under $5 million and less than 100 employees. The final sample contained 41 percent of the businesses with fewer than 25 employees. Based on a confidence level of 95 percent, the margin for error is plus or minus 4.4 percentage points. That means all other things being equal, the identical survey would have results within the margin of error 95 times out of 100.
Hartford Steam Boiler (HSB), part of Munich Re, is a multi-line specialty insurer and provider of inspection, risk management and IoT technology services. HSB insurance offerings include equipment breakdown, cyber risk, specialty liability and other coverages. HSB blends its engineering expertise, technology and data to craft inventive insurance and service solutions for existing and emerging risks posed by technological change. Throughout its 150-year history HSB’s mission has been to help clients prevent loss, advance sustainable use of energy and build deeper relationships that benefit business, public institutions and consumers. HSB holds A.M. Best Company’s highest financial rating, A++ (Superior). Connect with HSB on LinkedIn, Twitter and Facebook.
Munich Re is one of the world’s leading providers of reinsurance, primary insurance and insurance-related risk solutions. The group consists of the reinsurance and ERGO business segments, as well as the capital investment company MEAG. Munich Re is globally active and operates in all lines of the insurance business. Since it was founded in 1880, Munich Re has been known for its unrivalled risk-related expertise and its sound financial position. It offers customers financial protection when faced with exceptional levels of damage – from the 1906 San Francisco earthquake through to the 2017 Atlantic hurricane season and to the California wildfires in 2018. Munich Re possesses outstanding innovative strength, which enables it to also provide coverage for extraordinary risks such as rocket launches, renewable energies, cyberattacks, or pandemics. The company is playing a key role in driving forward the digital transformation of the insurance industry, and in doing so has further expanded its ability to assess risks and the range of services that it offers. Its tailor-made solutions and close proximity to its customers make Munich Re one of the world’s most sought-after risk partners for businesses, institutions, and private individuals.
Zogby Analytics is an international research firm, providing clients with information and knowledge critical for making informed strategic decisions since 1984. The firm conducts multi-phased opinion research with state-of-the-art opinion research capabilities and objective analysis and consultation for banking and financial services institutions, insurance companies, hospitals and medical centers, retailers and developers, religious institutions, cultural organizations, colleges and universities, IT companies and federal agencies.
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