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The index is the largest study of its kind into the digital capabilities of small businesses and charities. The report has found that across the UK, the most digitally capable organisations are twice as likely to report an increase in turnover compared to non-digital equivalents and are also more productive. In Wales, 76 per cent of businesses reported saving time from being online and 50 per cent said they saved on costs.

Nearly a fifth (18 per cent) of small businesses in the region say trading overseas is one of the key benefits of being online. However despite the advantages of embracing digital, 55 per cent of businesses in Wales do not have their own website and 51 per cent do not use social media.

Barriers holding Welsh firms back from doing more online include concerns about security (38 per cent) and a lack of staff with digital skills (34 per cent). Less than a third (26 per cent) of businesses in the region feel they have the skills to prevent online fraud and scams. Concerningly, 65 per cent said they weren’t investing anything in digital skills, and 32 per cent don’t see being online as relevant to their business.

While the gap between the digital capability of businesses has widened, there are reasons to be optimistic with 670,000 organisations across the UK on the cusp of having Basic Digital Skills.

The Basic Digital Skills measure was introduced in 2016 and designed to gauge an organisation’s digital capability. For businesses to have full Basic Digital Skills, they need to demonstrate at least one task in each of the following skills, managing information, transacting, communicating online and using digital to problem solve and create content like adverts and promotional material for their business.

Allan Griffiths, Lloyds Banking Group ambassador for Wales, said: “Some Welsh businesses are still behind the national average when it comes to embracing digital skills. However, even the most basic digital activations can have a significant impact on turnover, sales and brand awareness.

“We want to support small businesses use the internet and social media to help fuel their growth plans. As part of our Helping Britain Prosper plan, we recently held a digital workshop to give small businesses access to free, expert advice. We also have more than 1,600 specially trained colleagues locally, our Digital Champions, who are mentoring small businesses to help increase Basic Digital Skills.”