How RIAs Can Utilize Cyber Liability Insurance to Protect Their Business

In 2022, the average price tag for a data breach in the financial sector was $6 million. While every business sector needs to be cyber-aware, registered investment advisors (RIAs) and others involved in the financial industry must be especially security conscious. Hackers know that RIAs may have enticing bounties of customer information, banking details, and even payment data.

To stop these opportunistic criminals in their tracks, you can implement strong security measures, back up data regularly, and educate your employees. Here’s how to accomplish all three to thwart the next attack.

Implementing Strong Cyber Security Protection Measures

You can implement strong security measures by using a sequential, strategic approach. Here’s how step-by-step:

• Conduct a risk assessment. This involves pinpointing the kinds of data or systems hackers may target and vulnerabilities in your systems. For example, you may want to focus on securing customer personal data and updating all devices to prevent hackers from taking advantage of vulnerabilities in legacy versions.
• Encrypt your sensitive data. Encrypting data makes it unreadable for hackers. You should aim to encrypt data on your servers and databases and any devices employees use.
• Use multi-factor authentication (MFA) for all identity and access management (IAM) systems. Hackers can easily steal a username and password, but with MFA, you can force them to also gain access to a personal device, which may be enough to send them searching for lower-hanging fruit.
• Always update your software. Software manufacturers often release updates that address security vulnerabilities. In other words, they close vulnerabilities for you so that a simple update can secure your system.

Whether you’re new to the RIA space or a seasoned NAPA Premier member, these security actions eliminate some of the most common attack vectors criminals use to victimize your business.

Cyber Security Protection Tip: Back Up Data Regularly

Regular data backups are a strong cyber security defense against ransomware and other malware that can impact your network. Regularly backing up your data removes the leverage of ransomware attackers that encrypt data to force you to pay to restore access.

For example, suppose you backup your data twice a day, at 2:00 a.m. and 12:30 pm. You get hit with a ransomware attack at 1:00 pm. While this is unfortunate, the only data you’d have to worry about would be generated over the previous half an hour. So instead of paying off the attackers, you can simply wipe the affected systems clean and restore from your 12:30 backup.

Here are some types of data you may want to consider backing up on a regular basis:

• Information in your customer relationship management (CRM) system
• App-critical data used to power software such as accounting investment management solutions
• Investment portfolio data
• Employee records
• Payroll information
• Email and chat logs, especially those that involve interactions with customers
• Financial reports—even those that you feel would be relatively easy to regenerate

In addition, you want to back up any data that pertains to compliance. For instance, you may have agreements with clients, contracts, or disclosures that showcase your adherence to compliance standards. By backing these up, you can ensure you can give auditors what they need — even if they come knocking shortly after a cyber attack.

Educating Employees About Cyber Security Protection Best Practices

You can turn your employees from victims to cyber soldiers with ongoing cyber security education for RIAs. This helps transform employees into an effective front-line cyber security defense team focused on helping your business manage the liability resulting from data breaches and related cyber crimes.

Using Cyber Liability Education to Safeguards Your Network

By educating your RIA employees about cyber security risks, you can reduce the chances of :

• Employees leaving their usernames and passwords within attackers’ grasp
• People clicking attachments that download malware onto their computers
• Employees visiting malicious websites that infect computers
• Your internal staff falling for phishing scams designed to trick them into revealing sensitive information

Here are some steps you can take to keep your employees on guard against attackers:

• Make cyber security education a regular element of the onboarding process
• Recognize employees who report suspected phishing attacks or malware-laden emails
• Provide regular cyber security briefings that outline the latest attack techniques
• Conduct regular cyber liability training sessions that prepare employees and assess their readiness for attacks
• Occasionally hire penetration testers to assess your vulnerabilities, then use their pen test results in your next training session

Use Cyber Liability Insurance as a Security Safety Net

No matter how well you bolster your security, back up data, and educate employees, there’s always a chance hackers will still wiggle through your defenses. This is where cyber liability insurance can protect you from significant financial fallout.

With cyber liability insurance, you can get coverage for data breaches, legal action resulting from a cyber incident, ransomware payments, phishing and social engineering attacks, intellectual property theft, and more. Connect with NAPA today to learn more.