Hong Kong SMEs see a significant rise in cyberattacks year-on-year

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The top risks cited by respondents include data breaches (39%), phishing and smishing (35%), and malware (35%).

Almost one in three (30%) SMEs in Hong Kong have experienced a cyberattack at one point or another, a 6% increase on the 24% of businesses who said so last year, according to QBE Hong Kong’s latest SME Survey.

Having surveyed 616 SMEs between December 2023 and January 2024, the results showed that while businesses see a significant rise in cyberattacks year-on-year, awareness of and protection against cyber risks are on the rise from 36% to 48% over the past 12 months.

Nearly half (48%) of survey respondents said they are fully informed of possible cyber threats versus 36% last year, an improvement of 12%. Furthermore, while 16% of SMEs said last year that they had neither process nor protection against cyber risks; this year that has dropped to 11%.

The top risks cited by respondents include:

• data breaches (39%),
• phishing and smishing (35%), and
• malware (35%)

When asked about the forms of protection, 62% of SMEs utilised software solutions, followed by having dedicated staff to handle cyber security (45%), policies for handling potential cyber risks (45%) and staff training (43%). While only 42% of SMEs have purchased insurance for cyber security risks, 71% of respondents are open to purchasing cybersecurity insurance this year, compared to just 49% last year.

The survey also investigated views of business leaders of Hong Kong-based SMEs on two other operational risks that most affect SMEs – artificial intelligence (AI), and workplace safety and health (WSH). The results revealed that most respondents do not see AI as a job displacer. They also cited mental health as being somewhat important within the workplace safety and health paradigm.

Artificial intelligence (AI)

Most respondents (71%) do not share the view that AI will replace human workers across swathes of Hong Kong’s labour force. Just 21% expect AI to eventually replace or take over jobs in their company.

Interviewees did, however, show some apprehension about the negative potential of AI:

• 31% of Hong Kong SMEs said that AI was a threat to business activity;
• 18% were concerned with data leakages brought about by the advanced technology;
• 16% concerned over privacy issues and identity breaches caused by AI; and
• 13% were concerned about an AI-instigated cyberattack.

Respondents noted the potential of AI to increase workplace productivity, with 55% of those polled expressing that AI has had or will have an impact on their business, helping to improve functions such as human resources (6%), automated responses (5%) and sales and marketing (5%).

Workplace safety and health (WSH)

Most respondents (94%) felt mental health to be a key issue: 50% of SMEs cited mental health as being very important within the WSH paradigm, with an additional 44% recognising it as somewhat important.

The results also indicated that employers are boosting their support for staff wellbeing this year, particularly mental health. Key measures taken to ensure employee mental and physical wellbeing include:

• offering flexible working hours (39% this year: 31% last year),
• providing health and wellness benefits (35%:26%), and
• distributing care packages (35%:27%).

In addition, survey responses showed that 76% of SMEs are fully informed of the types of Employee Compensation Insurance (ECI) coverage they are required to provide, up from 55% last year. An impressive 90% of SMEs now effectively communicate insurance coverage and benefits to their employees, with 86% implementing return-to-work processes.

Comparisons between Hong Kong and Singapore:

2024 vs. 2023 results	Hong Kong	Singapore
Artificial Intelligence (2024)	Impact of AI on productivity - Impact (55%) - Neither/nor (26%) - No impact (20%) Threat of AI to business activity - Threat (31%) - Neither/nor (31%) - No threat (38%)	Impact of AI on productivity - Impact (49%) - Neither/nor (36%) - No impact (15%) Threat of AI to business activity - Threat (30%) - Neither/nor (39%) - No threat (30%)
Cyber Risks (2024:2023)	Awareness of cyber risks - Fully informed (48%:36%) - Somewhat aware (41%:53%) - Not aware (11%:11%) Cyber risk concerns (Top 3) (1) Theft/loss of customer data (53%) (2) Online criminal activities (51%) (3) Hacking by people (51%)	Awareness of cyber risks - Fully informed (47%:57%) - Somewhat aware (48%:40%) - Not aware (5%:3%) Cyber risk concerns (Top 3) (1) Hacking by people (55%) (2) Online criminal activities (54%) (3) Theft/loss of customer data (51%)
Workplace Safety and Health (2024:2023)	Awareness of Work Injury Compensation Insurance - Fully informed (76%:55%) - Not fully informed but know where to get the information from (23%:36%) - Not aware of what coverage is needed and not sure where to get the information from (2%:9%) Steps Taken to Ensure Employee Mental and Physical Wellbeing (Top 3) (1) Offer flexible working hours (39%:31%) (2) Offer health and wellness benefits (35%:26%) (3) Offer care packages (35%:27%)	Awareness of Work Injury Compensation Insurance - Fully informed (70%:71%) - Not fully informed but know where to get the information from (25%:27%) - Not aware of what coverage is needed and not sure where to get the information from (5%:2%) Steps Taken to Ensure Employee Mental and Physical Wellbeing (Top 3) (1) Offer flexible working hours (44%) (2) Offer working from home (35%) (3) Offer health and wellness benefits (28%) Note: No previous year figure available for Singapore for comparison.

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Lead image / QBE Hong Kong’s SME Survey