Large organisations prefer the cloud

Only just over a 3rd (38 per cent) of enormous organisations make sure that data held by external providers is encrypted.

The research by PwC and Infosecurity Europe also found that 56 per cent of small businesses don't check their external provider's security.

In the poll of security professionals from 447 organisations for the 2012 Information Security Breaches Survey, nearly three-quarters (73 per cent) said they were using a minimum of one online outsourced service.

Chris Potter, PwC information security partner, said: “The internet continues to facilitate more sophisticated business relationships. Businesses are putting their faith in third parties to deal with their data but many are taking a laissez faire attitude to the safety element.

“Small businesses might imagine that because their data is being hosted by an enormous cloud provider that good security controls may be in place, but this is not necessarily the case. Companies should check what security controls their providers are operating.”

The research also found that around 1 / 4 of enormous organisations, and one-fifth of small businesses, have highly confidential data hosted on the web. Half organisations of national importance, which include those within the financial services, telecommunications and utilities sectors, critically depend upon online services.