Cybersecurity breaches made headlines in 2014, but how troubling is it? Very, according to findings recently published by PricewaterhouseCoopers LLP (PwC).
According to PwC’s research, global cybersecurity incidents will increase by 48% next year. Unfortunately, financial losses resulting from these breaches are also on the rise and range from “1% to 3% of a nation’s annual gross domestic product.” And, according to PwC, a company’s own employees are the “most-cited culprits of incidents.” Yet in spite of these risks, financial institutions are still not doing enough to protect themselves and their customers against cyber threats.
That is about to change.
As PwC’s survey reminds its readers, the Securities and Exchange Commission’s Office of Compliance Inspections and Examinations (OCIE) announced earlier this year that it would begin examining the cybersecurity preparedness of more than 50 broker-dealers and investment advisors. In so doing, it offered guidance on the areas of examination and how to best prepare to fend off a cybersecurity attack. Its recommendations included, among other things, obtaining cybersecurity insurance, maintaining an inventory of all security incidents, having a risk-assessment process in place, and generally knowing and demonstrating an understanding of the risks the company faces. The OCIE is not alone; PwC points to a number of other domestic and international regulatory bodies that are working towards promulgating cybersecurity regulations, including the Federal Financial Institutions Examination Council.
Financial institutions and others would be well advised to stay ahead of cybersecurity regulations not only to help reduce the risk of cyber intrusions, but to protect themselves against liability resulting from such intrusions. It is never too late to implement or review risk management policies and procedures to protect against cybersecurity breaches and resulting losses. Indeed, it will soon become – if it hasn’t already – just another part of doing business in the Internet-connected world.
