4 Statistics that Will Help Make the Case for Data Security to Your Board
In the last few years, the financial services industry has reported approximately 4,900 serious data breach incidents annually. With more and more services like mobile banking and insurance claims being offered online, ensuring your firm has an effective cybersecurity plan has never been more important.
While the IT and security teams may appreciate this, company boards are sometimes reluctant to invest the amount of time and effort necessary for implementing a successful information security strategy. Your strategy may call for purchasing new software, updating your IT infrastructure, re-training your employees and bringing in outside consultants to identify gaps in your plan. You’ll need your company’s board on your side if you want the resources to move forward, so here are four statistics that help make the case for data security:
- Over 169 million personal records were exposed in 2015
Some of the highest profile breaches in 2015 included Anthem, the IRS, and Experian, but organizations of all sizes are vulnerable to a variety of threats. In fact, mid-market firms could be more at risk than larger ones, as they sometimes lack the resources and infrastructure of larger firms, despite being subject to the exact same regulatory and customer requirements. If your company is mid-sized and do not have a highly functional security system in place, you may be a prime target for attacks.
- The average cost per lost or stolen record increased from $217 to $221 in 2016
As financial services customers sharing more and more sensitive and confidential information online, the price of each stolen record is increasing. Hacking and other data theft methods allow criminals to access information like social security numbers, debit and credit card information, home and email addresses, bank and investment account routing numbers, insurance policy numbers and much more.
This means that financial institutions may have to spend large amounts of money investigating the full extent of the damage to their customers, settling legal claims or otherwise reimbursing clients and paying sums to both state and national government agencies who have assessed fines against them. In addition, the financial services sector experiences an unusually high rate of churn, defined as the loss of customers after a breach. And the average cost of a single breach over a period of 11 years in a higher-churn industry is estimated to be $12.1 million.
- 41% of cyberattacks originate from China; Turkey, Russia, and Taiwan are also major perpetrators
Foreign threats to your firm’s valuable financial information could be even more harmful than domestic ones. American perpetrators can sometimes be identified and tracked down, occasionally leading to recovery of information and stolen funds. Foreign cyber criminals, even if they are identified, may be located in countries where it’s either impossible or impractical for law enforcement to pursue them.
This means that overseas criminals might be able to target your company with virtually no threat of prosecution, and may even study it for years, watching for vulnerabilities and waiting to attack. In fact, it’s not uncommon for a group of criminals to target the same company again and again until a vulnerability has been corrected.
- 43% of financial services companies report being subject to phishing attacks
Over the last decade, many criminals have found that instead of hacking into financial institutions to get sensitive client information, they’ll simply pretend to be a bank, advisory firm, or insurance company and ask the clients themselves. While many phishing attacks are outside of a financial institution’s control, it can still create bad press and reduce customer retention if it isn’t dealt with properly.
To reduce the effects of phishing, institutions often need to invest time and money to educate their clients about threats, as well as take steps to investigate any claims of criminals masquerading as customer service representatives or other employees to steal customer data.
Financial Industry Security Investment Is Growing – Are You Keeping Pace?
Financial institutions are realizing that spearheading major efforts to secure their clients’ data is becoming increasingly important. Cybersecurity investment among financial institutions has increased by 67% since 2013, and 41% of firms say they’re planning to increase spending on third-party security solutions.
At Champion Solutions Group, we understand that it’s essential to keep your data secure and remain compliant with stringent financial industry regulations. Whether you’re a bank, an insurance company, an advisory firm or another type of financial institution, we have affordable tools to protect you against both traditional and emerging threats to your information. Contact us today at 800-771-7000 or via our contact form for a free consultation.