Data Breaches: A Major Risk for Financial Professionals

Dealing with cyber threats and staying compliant with government and industry requirements are now inherent risks of doing business for financial professionals. While some in insurance and financial services have awakened to this reality, most have significant work to do to protect themselves and their clients.

In today’s digital age, maintaining a formalized information-security plan and staying compliant with federal, state and industry data breach regulations have not only become essential management practices, but possibly a matter of survival, as well.  Here’s why.

Financial industry targeted

The financial industry is highly targeted by cyber criminals because of the valuable personal, financial and health-related information handled on a daily basis, and because brokers and agents are often the most vulnerable and least prepared to prevent or respond to cyber-attacks.

The industry has been rocked over the last two years by an onslaught of data breaches, resulting in well over 100 million Americans’ personal, financial and healthcare data being exposed.  Making things worse, criminals are looking to access larger businesses and their data by targeting insurance, brokerage, financial, legal, and accounting firms.

This is putting increased pressure on the industry to not only meet new client expectations for data privacy, but to also comply with government and industry standards for protecting confidential information.

Regardless of the types of products you provide, your clients expect you to keep their personal and confidential information private and secure.  Business clients in particular are becoming increasingly concerned about security risks with their third-party service providers, and are starting to require agents and brokers to answer lengthy security questionnaires about their cybersecurity and risk-management practices before doing business.

If you haven’t already begun receiving information-security assessments from key clients, including the requirement to sign an information-security agreement, be assured that this is the future of building and maintaining client relationships.  MORE