Companies which continue to under-invest in data security will find they are unable to deal with the increasing numbers of threats which are associated with new hacking and thieving technology, it has been stated.

Deloitte's security and privacy team partner James Alexander spelled out the problem shortly after the release of Deloitte's annual Technology, Media and Telecommunications (TMT) Security Survey, which revealed that 32 per cent of interviewees have cut their data security budgets in the last 12 months.

It was found that 83 per cent said they thought Web 2.0 technologies are a notable security threat despite this continued underinvestment, with a further 60 per cent of respondents being behind or are actively catching up with their internet security.

"The report shows that [small businesses in IT] can protect sensitive data simply by limiting information access to only those employees who need to have it," said Simon McCready, partner in Deloitte's security and privacy team.

A recent report unveiled by the Verizon Business Data Breach Investigations team found that 74 per cent of data breaches last year were a result of external sources.

In a recent survey of SMEs for Connect, the two most important benefits of outsourcing were guaranteed response times and allowing in-house IT staff to concentrate on more strategic issues.