Insureon Blog

Data Breach and Cyber Security: How to Protect Your Financial Firm from Cyber Attacks

13. November 2013 08:37

A lady accountant prepares her business to withstand cyber attacks

This week, London banks tested their cyber security mettle in an event called cyber attack “war games.” The event was designed to stress test financial institutions’ ability to withstand the kind of cyber attacks that are affecting businesses around the world with increasing regularity.

Specifically, the cyber attack war games simulated how a large-scale attack could cut access to ATMs, prevent communication among banks, and otherwise debilitate normal operations. The test reinforces once again the sober reality of what cyber attacks can mean for all kinds of businesses, especially those in the financial services sector. As it turns out, England isn’t the only country that’s taken the threat seriously.

Just last month, Wall Street hosted a similar event, prompting Judd Gregg, CEO of The Securities Industry and Financial Markets Association, to say that “Cybersecurity is a top priority for the financial industry.” Wall Street’s simulated cyber attack games allowed finance professionals to experience the potential effects of system crashes and disrupted market trading to test their preparedness for dealing with real threats.

If you run a small accounting or finance firm, stories of these tests may leave you wondering: what is a cyber attack, and how do I prevent it? If my firm’s cybersecurity is compromised, what steps do I have to take? Read on to find out the answers to these questions and more.

Cyber Attacks: Steps to Prevent Them

There are several steps you can take to protect your accounting or financial firm from potentially catastrophic data breaches:

Because you’re dealing with sensitive client information, you need to carry Cyber Liability Insurance. By carrying this policy, you’re protected from taking on the expenses associated with a cyber attack: damage control, potential lawsuits, and cyber extortion reimbursement, to name a few.

Security Breach Notification Laws for Accountants and Financial Firms

If your firm is attacked and you have to deal with the fallout of a security breach, there are certain laws that require you to notify your clients as soon as you’re aware the attack occurred. While this may seem daunting, it’s important that your clients be aware of the risks they face having their financial information in the hands of thieves that can use it to steal their identity, pillage their bank account, and more. 

Take a look at the NCSL State Security Breach Notification Laws, a comprehensive guide to data breach notification laws by state. Interestingly enough, if your accounting or financial firm is located in Alabama, New Mexico, Kentucky, or South Dakota, there are no notification laws. That doesn’t mean you’re in the clear, though.

Take a look at a recent insureon blog titled, “4 Reasons Your Business Should Have Cyber Liability Insurance” for more information on the risks your face and how you can prevent those risks from costing your company big time.

know your business risks

Tags:

Accountants & Bookkeepers | Data Breach | Small Business Risk Management

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