Businesses are not taking cyber security seriously enough, the Institute of Directors has warned, reporting that only 28 per cent of cyber-attacks were being reported to the police. .

In a new report, Cyber Security: Underpinning the Digital Economy, supported by Barclays, the IoD revealed that companies were keeping quiet even though 49 per cent of attacks resulted in interruption of business operations.

The scale of the threat should not be underestimated, the business group added, with more than six in 10 Welsh firms saying they had been sent bogus invoices via email.

The survey of nearly one thousand IoD members showed a worrying gap between awareness of the risks and business preparedness.

While 94 per cent of Welsh business leaders said that cyber security was important, only 70 per cent had a formal strategy in place to protect themselves and just 25 per cent held insurance against an attack.

Worryingly, official efforts to tackle cybercrime seem to be failing to get through to businesses, with 50 per cent of Welsh IoD members surveyed never having heard of Action Fraud Aware, the UK’s national reporting centre for fraud and internet crime.

The growing threat of breaches will create a ‘cyber paradox’, the IoD said, meaning that although business will increasingly take place online, firms will no longer feel confident in the encryption protecting sensitive information when it is transferred. This could lead to companies going back in time, and resorting to old-fashioned methods for sending important data.

Professor Richard Benham, author of the report, said: “Cybercrime is one of the biggest business challenges of our generation and companies need to get real about the financial and reputational damage it can inflict. The spate of recent high-profile attacks has spooked employers of all sizes and it is vital to turn this awareness into action. Customers and partners expect the businesses they deal with to get it right.

“As attacks become more prevalent and increasingly sophisticated, businesses need to defend themselves, know how to limit damage, and be ready to respond quickly and comprehensively when the inevitable happens. No shop-owner would think twice about phoning the police if they were broken into, yet for some reason, businesses don’t seem to think a cyber breach warrants the same response.

“Our report shows that cyber must stop being treated as the domain of the IT department and should be a boardroom priority. Businesses need to develop a cyber security policy, educate their staff, review supplier contracts and think about cyber insurance.”

Karen Thomas, head of corporate and business banking for Barclays in Cardiff and South Wales Valleys, said: “Businesses must recognise the threat that cybercrime can pose to them, their reputation and subsequently their bottom line. With the number of customers going online rapidly rising the issue of cyber security has never been more important. Companies need to consider cyber security as critical to their business operation as cost or cash flow.

“Some of the actions that businesses can take to get cyber smart include creating a cyber security strategy, raising awareness amongst staff of the common cons used to commit cybercrime, installing software that keeps them and their customers’ details safe and keeping all software up to date."