As businesses increasingly rely on digital technology to store and transmit sensitive information, the risks associated with cyberattacks have increased. Cybercriminals are targeting financial institutions for their valuable customer data and financial information. The cost of a data breach can be detrimental to a business, causing a loss of revenue, customer trust, and potentially the entire business. Written Information Security Programs (WISP) can help businesses protect themselves from these attacks.
WISP is a comprehensive set of written policies and procedures that outlines an organization’s approach to protecting sensitive information. The primary goal of a WISP is to create a secure environment for the handling, storage, and transmission of confidential data. A WISP can include employee training, access controls, and a plan for incident response.
The impact of WISP on financial businesses can be significant. In a study by Ponemon Institute, the average cost of a data breach for companies with a WISP in place was $5.19 million, while the cost for those without a WISP was $7.91 million. This indicates that having a WISP can save businesses millions of dollars in the event of a data breach. Additionally, a WISP can help financial institutions comply with industry regulations, such as the Gramm-Leach-Bliley Act (GLBA), which requires financial institutions to implement safeguards to protect customer data.
Business insurance is now requiring WISP due to the significant costs associated with data breaches. Cybersecurity insurance companies recognize the need for businesses to have preventative measures in place, and WISP is considered a best practice. Businesses without WISP may have difficulty obtaining cyber insurance coverage or may pay higher premiums.
The average cost of a data breach for financial services companies is $18.3 million, according to a report by Accenture. The same report found that financial institutions experience an average of 125 security breaches per year, with an average cost per breach of $1.7 million. These statistics highlight the importance of businesses implementing a WISP to protect themselves from financial and reputational harm.
Protecting financial businesses using WISP involves several steps.
- Risk Assessment: The first component of a WISP is a risk assessment. This involves identifying potential threats and vulnerabilities to an organization’s data security. A thorough risk assessment should cover all aspects of the business, including physical security, information technology, and personnel. Once potential risks are identified, organizations can take the necessary steps to address them.
- Written Policies and Procedures: The second component of a WISP is a set of written policies and procedures that outline the steps employees must take to protect sensitive data. These policies should cover all aspects of data security, including access controls, password policies, data encryption, and incident response. The policies should be regularly reviewed and updated to ensure they are up-to-date with the latest cybersecurity threats.
- Access Controls: Access controls are a critical component of a WISP. They ensure that only authorized individuals can access sensitive data. This includes implementing strong password policies, multi-factor authentication, and limiting access to specific individuals based on job responsibilities.
- Data Encryption: Encrypting sensitive data is an effective way to protect against unauthorized access. Data encryption involves converting sensitive data into code, making it unreadable to anyone who does not have the decryption key. Businesses must ensure that all sensitive data, both in transit and at rest, is encrypted.
- Incident Response Plan: Despite taking all necessary precautions, organizations may still experience a cybersecurity incident. An incident response plan outlines the steps employees must take in the event of a security breach. This includes identifying the breach, containing the damage, and notifying the appropriate parties. An effective incident response plan should be regularly tested and updated.
- Employee Training: The final component of a WISP is employee training. Employees play a critical role in protecting sensitive data, and they must be aware of their responsibilities when it comes to data security. Training should cover all aspects of the organization’s data security policies and procedures.
For most CPA’s, Bookkeepers, Tax Preparers and other organizations that provide financial services to businesses and individuals these new rules and requirements can seem daunting. Thankfully the security experts at HI-TEX Solutions can guide you through the process using our documented procedures to ensure you meet your WISP requirements with your insurance carriers and industry regulations. Should the unthinkable happen know that our team of support experts will take the lead to help remediate and prevent future compromises.
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