According to the National Cyber Security Alliance study, 60% of hacked businesses go out of business within six months. The vast majority of damage done in cyber attacks is due to the inability of the company to respond because they have not developed a cyber prevention and response strategy. Think about it. We practice fire drills; shouldn’t we do the same to prepare for risk with similar catastrophic consequences? If your e-commerce system, website, email, or customer data was suddenly inaccessible because of an attack, would you be able to get back up and running within minutes, hours, days, or at all? That depends on your business’s level of cyber resilience. Continue reading
As a financial services firm, your clients depend on your guidance to help them make the most out of their fiscal decisions. From accounting to hedge fund management, your clients gain peace of mind when appropriately advised. These relationships require trust, often built over time. What would happen if that trust were threatened? How long could you keep your clients at ease if they could not retrieve information or make withdrawals? What would happen if you couldn’t get their tax returns filed in time? What would happen if someone’s identity were stolen and you couldn’t access their information to stop it?
In the financial industry, downtime can be detrimental to your ability to do your job and customer relationships. Nowadays, downtime threats are not only weather-related. Entire systems can fall victim to ransomware, and individual identities can be stolen. In these instances, your clients will turn to you for financial security. Being able to deliver that service is crucial to your reputation and business’ livelihood.
A False Sense of Security
While you may be taking some precautions, such as securing and backing up your sensitive data, sometimes that’s not enough. There is a common misconception that data is safe if backed up once a day. Still, this outdated practice is no longer sufficient for several reasons:
- If you forget to perform the backup or the backup process fails, you’re not protected.
- If you only back up your files once a day, you’re left vulnerable to the loss of an entire day’s work.
- If you don’t correctly validate your backup files, you could be in for an unpleasant surprise when trying to use those files to restore your company’s operations.
- If you only back up your files on-site, you could lose them too—leaving you with no way to meet client requests.
- If you only back up your raw data, rather than all your application and server configuration files, it could take several days to restore your practice —because you will also have to rebuild your servers, operating systems, applications, etc.
Some financial services firms turn to business interruption insurance to cover the costs to rebuild, restore, or regain lost income. While an insurance provider may write you a check for the cost of a server that gets damaged due to a broken pipe, it won’t protect you from damaged client relationships. Ultimately, your reputation isn’t something for which you can easily be compensated.
How Vulnerable Are You?
If your company identifies as a business that doesn’t have the IT resources to effectively recover from a significant outage, make sure you’re weighing all of the factors around the costs of downtime. Here are the facts:
- US businesses lose $12 billion annually due to data loss.
- 93% of companies that lose their data center for 10+ days file for bankruptcy within one year.2
Best Practices for Financial Services IT
In a 2017 survey by the Depository Trust & Clearing Corporation, 71% of financial services firms reported cyber risk among their top five concerns. Their concern seems justified as 2017 was a costly year for the financial services industry. The Ponemon Institute reported that the cost of cyber attacks in 2017 averaged $18.28 million per financial services company. These costly incidents seem to be on the rise, but there are some precautions you can take to safeguard your data:
- Outsource your company’s IT needs to an expert who has experience in the financial industry.
- Don’t sacrifice quality to save money when purchasing hardware. It will benefit you (and your bottom line) to have robust technology in the long run.
- Perform timely hardware and software updates, maintenance and backups.
- Establish, review and maintain system security of all practice technology.
Any company that has not recently re-assessed its backup and disaster recovery procedures should therefore do so to conform to these industry-standard best practices.
The Better Way: Business Continuity
Business continuity describes a complete solution for backup and disaster recovery. A proper business continuity solution will protect data on-premises and in the cloud. Whether data is on servers or in SaaS applications, it needs to be backed up. Business continuity goes a step further and offers you the ability to restore your data, which we call disaster recovery.
Whether a business is faced with a natural disaster or one human-made, a robust solution will have you up and running in minutes. Solutions that leverage the hybrid cloud can guarantee a quicker restore time as well. Why? Local backups are great to keep data stored on local devices, but what happens if something happens to that device? A hybrid cloud backup solution takes an initial backup on a local device and then replicates the backup to a cloud server. Cloud-only solutions are not as reliable on their own due to bandwidth issues. A hybrid model works to alleviate the vulnerabilities by implementing both processes to fill in the gaps. That’s intelligent business continuity.
At Hemi IT Solutions, we offer incredible Managed IT solutions for businesses in Calgary and Edmonton. Our focus is creating and maintaining partnerships with our clients based on trust, efficiency and follow-through. For over 10 years, we have engaged our clients through excellent service and pragmatic advice.
The financial industry must take extra steps to protect its customers’ sensitive data out of legal obligation and respect for their privacy. With careful security measures, they can ensure clients feel secure, entrusting them with this vital information.
Despite the state-of-the-art defences companies employ, the threat of a data breach still looms ominously over sensitive information. Fortunately, there are effective strategies to lessen this risk and keep our most valued assets safe.
News of costly data breaches is all too common in the financial sector. From Capital One to other institutions, malicious actors have exploited security loopholes and put sensitive information at risk – something that casts a wary eye on how protected our digital assets are. These companies must remain vigilant in providing adequate measures to secure their customers’ data from exploitation.
Finance Companies as the Leading Recipient of Data Breach
The leading cause of data breaches in the financial sector is an eye-opener; it isn’t those dreaded hackers declaring war online while wearing creepy masks. The truth is that more than half of the occurrences are attributed to internal activities – hidden in the daily mundane activities of employees and everyone else who has access to the IT infrastructure and network.
The finance sector gets the brunt, with 40% of economic crimes related to financial services. This alarming figure puts much pressure on finance companies and services to protect data and improve their infrastructure’s security.
Finding the Right Data Security Solutions
There’s no one-size-fits-all approach to improving data security in the financial sector. What you need is a layered solution. The term “layered” means using several methods to protect sensitive data. So, what are these methods? Let’s go through every step in detail.
Step 1 – Understand where your data is and how it flows.
The first step in improving your company’s data security is to know where vital information is located and its movement. Regardless of the type of data or information, you must remember it is constantly moving as your people need to access, download, or transfer it from the server to an endpoint device.
Step 2 – Focus on endpoint protection.
Embracing data mobility is essential in the modern IT and networking world. However, it can create stress for financial companies who worry about keeping client information secure. To tackle this challenge, increased endpoint protection should be a priority – like using geofencing to alert when suspicious activity occurs or remotely deleting devices if needed. Implementing these strategies ensures that your organization gets the most out of valuable mobile capabilities while always protecting its sensitive assets.
Step 3 – Figure out the company’s weakest links.
A data breach happens without warning; it doesn’t take a rocket scientist to determine where the leak comes from. The first and likeliest source of the breach is your company’s weakest link: your employees. Your recent venture into improving data security by buying and incorporating new tech won’t make sense if you don’t pair it with employee training. Acknowledging the shortcomings and inability of your people to cope with increased security measures means that they need to undergo a refresher.
It’s never too late to teach your employees the importance of having the right technology to protect your business against data breaches. Make them realize that the cause or source of the breach may very well come from anyone who forgets to log out or accesses the company’s network through their personal computer.
Step 4 – Perform a more comprehensive security risk assessment.
Identifying your employees as the office’s weakest link is just half the job of figuring out the risk areas. The next step is to perform a security risk assessment to identify other vulnerabilities. The evaluation is, by far, the most effective way to figure out your company’s risk profile. Once you get the facts right, that’s the time you create a strategy to implement stricter security measures.
Step 5 – Periodic audits are necessary, too.
Doing periodic audits isn’t just a practice of efficiency. Every business or company in the financial sector must do it because it brings to light some issues in the IT infrastructure and network which have remained undetected. Audits are also used to ensure that your company’s security policies align with industry standards. You must ensure that your people follow laws and regulations, including regulatory compliance provisions.
Step 6 – Back up your company data and do it regularly.
Data backup in a company that stores crucial client financial information is essential and is not a one-time thing. Even if you have an IT security strategy, you can’t just forget about backing data up once everything is set in motion. Consider it as part of your company’s regular assessment and maintenance strategy.
With secure backups, you are confident that your files are safe from being deleted, exposed, or stolen in case of a data breach or ransomware. But is your data safe from potential physical damage to your IT infrastructure caused by fire, earthquake, flood, and the like? The best data security practice is to establish a storage option that’s outside of your business premises.
Without the collaboration of efforts from all staff, data security can easily be compromised in any corporate setting. As technology advances, so does the need for stricter protection; it’s not enough to rely on just IT infrastructure and personnel – everyone should take ownership when it comes to safeguarding information within the company.