Awareness of the vast and complex cyber risk landscape is in decline among local small- and medium-sized enterprises (SMEs), according to a survey conducted by insurance company, QBE.

In a survey of 650 Singapore-based SMEs between December 2023 and January 2024, business leaders were polled for their views on operational risks, which includes cybersecurity, AI, and workplace safety and health (WSH).

The proportion of SME executives fully aware of possible risks decreased from 57 per cent to 47 per cent this year, which is likely due to a smaller number of SMEs (25 per cent) affected by cyber events (38 per cent in 2023).

However, there is an increase in the number of executives who felt that they were somewhat aware of cyber risk, up from 40 per cent in 2023 to 48 per cent in 2024, implying that these executives are aware of new risks that they may not yet know of.

Malware (43 per cent), data breaches (43 per cent), and phishing and smishing (39 per cent) were ranked as the top risks highlighted by the respondents.

According to QBE Singapore head of underwriting, retail and SME Shun Quan Goh, the survey also found that the number of SMEs that do not have processes and protections against cyber risks rose significantly from 9 per cent in 2023 to 19 per cent in 2024.

“This number shows how vulnerable SMEs may be to cyber risks, and underscores the need for companies to educate, upskill and protect themselves in this area. Businesses cannot afford to be complacent about cyber security, it really is a matter of when, and not if, a cyber breach happens,” Goh said.

Among those with some forms of protections, 59 per cent of SMEs cited software solutions as the main form of protection, followed by staff training (46%), dedicated staff to handle cyber security (44%), and policies for handling potential cyber risks (43%).

On cyber insurance, only 38 per cent of SMEs have cyber insurance with 55 per cent of respondents open to purchase cyber insurance this year.

“The cyber risk landscape evolves quickly, and it can be hard to keep up. This is where insurance comes to the fore: not only can we help businesses manage and transfer the risk, we can help them stay ahead of emerging trends,” Goh added.

Regarding the potential of AI, only one-third of respondents expect AI to replace their jobs. Most respondents see AI as a productivity enabler.

Only 30 per cent of SMEs saw AI as a threat to their business, but most were unconcerned about the nefarious potential of AI. 15 per cent were concerned about an AI-instigated cyber-attack, 10 per cent were concerned about AI privacy issues and identity breaches, and 6 per cent were concerned with data leakages.

In general, 49 per cent agree that AI has and will have an impact on their business productivity in areas such as automated response (6%), routine manual work (6%), finance/accounting/audit functions (4%).

“AI certainly has the potential to be a great enabler of better productivity, and I would urge SMEs not to lose sight of the risks as they embrace this technology and all the benefits that can come with it,” Goh said.

This year, we also saw workplace safety incidents decreased with 63 per cent of SMEs reporting no workplace safety incidents as compared to 55 per cent in 2023.

The top three measures taken by SMEs to ensure workplace safety are fire safety (44%), electrical safety (37%), and general workplace training (37%). In contrast, the top three measures for 2023 were fire safety (54%), electrical safety (47%), and machinery, plant, and equipment safety (40%), suggesting a safer physical working environment.

When it comes to mental heath, 89 per cent of SMEs (94 per cent in 2023) find mental health very or somewhat important.

Businesses are taking actions to ensure mental and physical wellbeing, which includes offering flexible work hours (44 per cent), work-from-home arrangements (35 per cent), and health and wellness benefits (28 per cent).

“Our aim is empower SMEs to create positive organisational cultures while ensuring the security and support of their valued workforce. By taking proactive steps to address employee well-being and risk management, SMEs can strengthen their resilience and pave the way for sustained success in today’s competitive talent market,” QBE Singapore CEO Ronak Shah said.

This article originally appeared on Channel Asia.