Forget about Internet crackers, employees are the biggest security problem for most businesses.

That's the main conclusion of a survey of UK IT managers which suggests that most firms are prepared for the threats posed by viruses and hackers, but are still struggling to secure data on their own networks.

Around half (51 per cent) of the respondents to the Oracle/Institute of Directors-sponsored survey, said that internal security breaches were a bigger threat to business than those originating outside their companies. This belief was particularly strong among smaller firms.

Oracle quotes a study by the Computer Security Institute (CSI) which concluded that the average insider attack cost the target enterprise approx. $2.7 million, compared with $57,000 for the average outside attack.

Oracle reckons firms need to switch their attention to securing data on their networks from "curious" employees via measures such as encryption and password protection.

This is easy enough, Oracle suggests, but "90 per cent of the time businesses will not put these safeguards in place because of drains on performance or other similarly weak excuses."

Ouch.

One in three of the 100 IT managers polled during the survey cited the loss of customer confidence as the most damaging aspect of a security breach. Downtime and loss of commercially sensitive information (both 23 per cent) were selected as the next most important. Credibility (14 per cent) and loss of revenue (7 per cent) were selected as the least important factors.

In a worrying finding for the development of e-commerce, more than a quarter (27 per cent) of respondents to Oracle study stated that concerns over security had prevented them granting external customers, suppliers or partners access to their Web site. This sentiment was expressed most strongly by firms with a turnover exceeding £250m, the study (conducted by IT research consultancy Vanson Bourne) discovered.

The survey reveals a certain amount of confusion among IT managers as to where responsibility for security lay. While 32 per cent of companies stated that a non-IT executive was in charge of security, 22 per cent said they had a manager whose remit was to deal exclusively with security. ®