Large enterprises are concerned about cybersecurity risks posed by their suppliers. Despite being disproportionately targeted, many SMEs remain underprepared, with 43% of cyberattacks targeted at their digital front door.
The enterprise Goliath is concerned about its suppliers. These SMEs are less prepared and disproportionately targeted, with 43% of cyberattacks directed at their digital front door.
Furthermore, PoPIA holds larger organizations legally responsible when there is a breach by a supplier, meaning that SME suppliers have effectively become one of the most significant entry points and concentrations of risk into the corporate supply chain. A risk that is becoming increasingly costly and challenging to manage.
The small accounting firm, the logistics provider, the IT support company – none of these companies would describe themselves as a cybersecurity target, and yet, that's what makes them one.
Unfortunately, this also makes them less attractive to venture into. There is a growing body of evidence pointing to how suppliers are responsible for a large number of data breaches. According to IBM, in 2025, 17% of data breach incidents were due to third-party vendor and supply chain compromises at an average cost of R29.6m, and the average price for a South African company is around R44.1m.
Although this number drops to R53.1m in 2024, it is still an expensive bill to pay for a poorly secured third-party supplier. In its 2025/26 strategic plan, South Africa's information regulator reported that it received 1,727 security compromise reports in the 2024/25 financial year and expects to receive approximately 2,500 breach notifications in 2025/26.
Then there is the legal risk of violation. Under POPIA Sections 21 and 22, the responsible party bears full liability to the information regulator in the event of a data breach, regardless of where in the supply chain the breach originated.
An enterprise accepting a non-compliant SME into its ecosystem is absorbing a legal and financial risk that it cannot control. And with third-party suppliers having access to corporate data, it is easy to see why South African enterprises are tightening the way they assess the cyber security posture of their suppliers. The level of SME investment in security is increasingly becoming an explicit procurement and contracting requirement.
A new procurement reality for SMEs
The message for SMEs at the other end of the supply chain is clear. Demonstrate that your business is safe and POPIA compliant when an enterprise audits or re-tenders, or accept that your contract will not be renewed.
This new competitive reality redefines the entire conversation about what cybersecurity investments mean for small business. It is increasingly becoming a certification that determines whether an SME can sustain a business as the cost of being the weakest link is very high.
The framing that has long dominated SME thinking – that cybersecurity is a cost that should be reduced or deferred – is now actively working against companies that have it. The alternative approach is far more commercially compelling.
Cybersecurity as a competitive advantage
When an SME can demonstrate a clear security stance, it is now a differentiator in enterprise procurement. When you can go into a procurement conversation with evidence of PoPIA compliance, endpoint security, tested incident response and trained staff, you are already sitting ahead of companies that are still not thinking of security as a priority.
Compliance is also a sign of trustworthiness. If you can bridge the security gap as an SME, then yes, you are protecting yourself, but you are also positioning yourself in a market where enterprise buyers are actively looking to reduce risk in their ecosystem.
However, this investment in security needs to be balanced with flexibility. You can't guarantee that every attack will be stopped, which means you need to know that you have policies in place to prevent an incident, restore operations, and maintain continuity without significant loss.
Creating flexibility on budget
For SMEs looking to build that position within the realities of limited budgets, the approach is layered and sequential. Endpoint security provides a technical foundation that needs to be supported by cybersecurity training (especially for finance and operations staff at risk of phishing or payment fraud) and business continuity planning.
Tested, regularly verified backups remove the leverage that ransomware operators rely on, and documented PoPIA compliance turns your business into a visible and audible asset.
Of course, security costs money, and yes, it will impact the budget's bottom line, but the real question facing SMEs in South Africa today is not whether cyber security is affordable, but rather the absence of it.
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