Cyber-attacks and data breaches cost financial services firms more to address and contain than in any other industry according to a report from Accenture and the Ponemon Institute. The report further reveals that the rate of breaches in the industry has tripled over the past five years.

Data breaches are catastrophic for any industry, but particularly in the finance sector where consumer trust is paramount. The reputational damage to an organisation can be terminal with further research showing that up to a third of customers in finance, retail and healthcare will stop doing business with organisations that have been breached. In addition, companies that have experienced a breach often see an increased cost when it comes to acquiring new customers.

Whilst it is not possible to prevent all breaches, there are certain steps financial organisations can undertake to minimise risk:

Always Vigilant

Vigilance should be an essential part of an organisation’s strategy.Companies should be working with an IT managed service provider to ensure that they are always following up to date best practice guidelines and pro-actively questioning the set-up and the associated risks. A Managed Service Provider has the benefit of working with various organisations that span many verticals and this breadth offers many proactive benefits and insights into attacks and fixes. It’s also important to design a business continuity plan to ensure the minimum possible exposure to risk and a guaranteed successful recovery point both in time and data.

Any business continuity plan needs an executive owner/sponsor who has the experience and authority to get things done in a timely and processed manner.  All action plans should be regularly reviewed at board level and shared with all stakeholders so that all the risks and organisational implications are visible and planned for to avoid the plan’s implementation being hampered by budget or knowledge constraints.

 Data Classification and Encryption

Financial organisations should take steps to classify their data in accordance with its sensitivity relative to a potential breach. There is no doubt that classification of data can help financial services deliver tangible benefits such as reducing risk, while at the same time ensuring compliance with key industry regulations. The most sensitive data should have the greatest protection layers and encryption around it, withaccess level policies in place. Examples of this data could be investor information, internal research and position/trade information. Were this data to be breached it would present significant business risk to the fund and all measures should be taken to ensure this data is inaccessible. It’s also imperative that all employees within the organisation are familiar with how the data is classified and protected to ensure they are all conscious of their own security levels. This can help to provide an early warning system of a potential threat caused by human error.

 Software Management

There are numerous entry points that are vulnerable to intrusion and you should make sure you are applying the latest software patches where possible. After all, it is as important for vendors to keep their software free from bugs as it is for you, so always make sure you do not ignore patches.  Organisations should apply patch updates regularly or deploy technology which removes the need for manual updating. This technology works by automatically identifying vulnerable applications and deploying the latest updates as they become available.

 Employee engagement

Every organisation should have a process in place that involves the regular review of cyber security risks from board level down to the rest of the organisation.  It is important to remember that most security breaches are due to human error, with the wrong recipient for an email accounting for many of the security breaches. This highlights the importance of well-informed staff in avoiding a threat to an organisation’s IT systems. Employees must be regularly trained on any infrastructure or technology that is put in place to address cyber security. The technology used to protect an organisations data is only ever as good as the people that are using it. Clear and precise usage guidance is imperative to minimise the chances of human error.

Top Down Security Culture

Fostering a culture of security can significantly reduce an organisation’s risk. CIOs and CISOs need to ensure that every employee within the organisation is aware of the threats they could face, whether it’s a phishing email, sharing passwords or using an insecure network. The cyber security landscape is continuously changing with hackers finding new ways to access information. Hence one-off training sessions will not suffice: creating a culture of consistent awareness of threats is required along with a robust security and continuity plan throughout the business.

For financial institutions the threat of a data breach has never been more real. The likes of Lloyds and HSBC have fallen victim to attacks in recent years and due to the sensitive nature of the data which they hold, financial organisations will continue to be a primary target for hackers. Whilst an attack cannot be fully prevented, by taking control of its security solutions and fostering a culture of continuous security awareness, financial organisations can reduce the risk of becoming the next big headline.