9 Cybersecurity Stats Independent Financial Advisers Need To Know

Robust cybersecurity is essential for Independent Financial Advisers (IFAs). Protecting sensitive data, such as banking details and personally identifiable documents, is crucial for maintaining client trust and complying with regulatory requirements.

In this post, we outline 9 cybersecurity statistics financial advisers need to know, covering the threats you should be aware of, their impact on your business, and how to safeguard against them.

What Cybersecurity Threats Do You Need To Be Aware Of?

1. In 2020, 10% of Data Breaches Happened Within the Financial Industry, With 58% Involving the Loss of Personal Data

Personal information is abundant within financial services, making it a prime target for data thieves. Financial firms are starting to realise that their existing cybersecurity measures might not be enough to fully protect their client data.

2. 80% of Financial Services Firms Have Seen an Increase in Cyberattacks Due to COVID-19

The pandemic has pushed communications and services online, especially in financial services. Protecting your business from digital risk is more important than ever, with firms being encouraged to revisit their cybersecurity strategies.

3. 93% of Businesses Have Had Data Breaches From Outbound Emails in the Past Year

For companies in financial services, healthcare, and legal industries, outbound email has been a significant source of data breaches, often due to human error.

4. 95% of Email Data Breaches Are Caused by Human Error

While cybersecurity solutions often focus on threats like phishing and malware, it's crucial to acknowledge that most data breaches stem from people, with 52% of individuals admitting to unintentionally sending an email containing sensitive information.

Why Does This Matter To Your Business?

5. In 2021, The Average Total Cost of a Data Breach Increased by 10% to $4.24 Million

The financial impact of a data breach can be devastating, especially as the increase in digital communications provides more opportunities for breaches to occur. For instance, 20% of organisations have experienced a data breach due to remote work, with incidents taking, on average, 29 days longer to identify and contain.

6. 33% of UK Businesses Have Lost Customers Following a Data Breach

Reputation is an IFA’s greatest asset. Failing to protect client data can lead to significant losses, with 38% of businesses losing customers due to security issues.

What Can You Do To Protect Your Company?

7. It Only Takes 10 Minutes To Crack a 6-Character Long, Lowercase Password

Passwords are a common security measure but are also one of the easiest access points for intruders. It is recommended to change your password every 3 months, using a combination of random words to create at least 10 characters, including upper and lower case letters, numbers, and symbols.

8. Financial Accounts (93%) and Email Accounts (53%) Are Ranked as Most Important to Secure With Two-Factor Authentication

While having a strong password is crucial, using two-factor authentication (2FA) adds an extra layer of security. For outbound email, 2FA ensures that only the intended recipient can access the message, protecting sensitive data.

9. Security-Related Risks Are Reduced by 70% When Businesses Invest in Cybersecurity Training and Awareness

Investing in dedicated cybersecurity training can keep employees aware of potential threats. However, as of 2019, only 27% of UK businesses had conducted any training in the previous 12 months.

Key Takeaways:

• Cyber threats, especially to email, are becoming more frequent and have been intensified by the pandemic.
• Businesses that neglect cybersecurity risk significant financial and reputational losses.
• Protecting client data by using strong passwords, two-factor authentication, and cybersecurity training is strongly recommended.

References:

In 2020, 10% of Data Breaches Happened Within the Financial Industry, With 58% Involving the Loss of Personal Data, Verizon, 2020.

80% of Financial Services Firms Have Seen an Increase in Cyberattacks Due to COVID-19, Fintech News, 2020.

93% of Businesses Have Had Data Breaches From Outbound Emails in the Past Year, Security Magazine, 2021.

95% of Email Data Breaches Are Caused by Human Error, ThriveDX, 2021.

In 2021, The Average Total Cost of a Data Breach Increased by 10% to $4.24 Million, Security Intelligence, 2021.

33% of UK Businesses Have Lost Customers Following a Data Breach, RedSeal, 2019.

It Only Takes 10 Minutes To Crack a 6-Character Long, Lowercase Password, DataProt, 2021.

Financial Accounts (93%) and Email Accounts (53%) Are Ranked as Most Important to Secure With Two-Factor Authentication, Channel E2E, 2021.

Security-Related Risks Are Reduced by 70% When Businesses Invest in Cybersecurity Training and Awareness, Pensar, 2021

Reviewed By:

Sabrina McClune, 19.06.24

Sam Kendall, 19.06.24