When it comes to dealing with hackers and data breaches, small banks have more to lose than big banks: They face an uphill battle to win back customer trust once it’s gone, and customer trust is a core value proposition for small and mid-sized banks. They also have fewer resources at their disposal than larger financial institutions.
Data loss incidents are on the rise worldwide, and hackers are responsible for most of these events at banks, according to a report from KPMG International. Criminals are targeting financial services because that’s where the money is—and small and regional banks have the same exposures as their larger counterparts.
Cyberattacks deal a devastating, one-two punch to small and regional banks. First, these institutions have fewer assets, so a multimillion-dollar loss is a significantly larger percentage of their assets, and a bigger drain on their coffers. Second, these banks have a strong relationship with their customers, many of whom defected from big banks for more attentive customer service. A data loss incident can be viewed as a betrayal of trust that prompts customers to take their banking elsewhere. According to a Ponemon study, organizations suffered lost time and productivity followed by loss of reputation with an average cost of $840,000.
So how can small and regional banks reduce the risk of breach? Consider these six steps to jumpstart your bank’s security plan:
Manage information assets like all other assets: Chart your bank’s data life cycle. Identify how it is collected, stored, accessed and, if sensitive, protected. Collect only what’s necessary. Keep data that needs to be available secure and manage access vigilantly. Move data that doesn’t need to be accessed to a location with limited or no external access. Securely dispose of data that is no longer needed.
Perform a security assessment: Work with an experienced data risk security advisor to evaluate your data risks. This will reveal your weak areas before they are exploited and identify areas that require immediate attention and resources. Be sure to follow through on top recommendations to make progress.
Appoint a security officer: Information technology and information security are different disciplines. Both functions are necessary, but expecting IT to fulfill the duties required for information security is ill advised. An ISO should report at least quarterly to management to maintain visibility and momentum as the security program evolves
Educate employees about security best practices:Do you want your workers to be individual points of exposure or protection? Provide them with knowledge and procedures to execute your security plan. And don’t stop there. Publish monthly or quarterly reminders to keep security top of mind. Soon these practices will become part of your bank’s culture. Security needs to be routine so it becomes “just how we work.”
Monitor social media exposure: Risks abound when employees overshare on social networks without guidance. When a network engineer posts his experience with specific operating systems, firewalls and routers, he just mapped your network for a potential intruder. Similarly, an employee’s resume details on LinkedIn can inadvertently expose you to a security breach.
Limit data access to only those who need to know: Paper and electronic data can by managed through system policies, security measures, and audits. The human element, however, is more difficult to control. As a result, it’s important to grant access only to necessary data; and to be deliberate about how it’s used and shared
Security doesn’t have to be cumbersome, complicated or expensive. These small steps can go a long way toward shoring up your defenses against cyberthreats.
Deena Coffman is chief operation officer and information security officer for IDT911 Consulting