The large majority of industries recognise the value and importance of cybersecurity, but those in the accounting and financial management sectors cannot afford to ignore it. Although there is no denying that the internet and sophisticated software have increased productivity and accuracy in many fields, technological advancements have also made them easy targets for cybercriminals. The daily increase in security risks makes it more challenging to safeguard your company from data breaches.
These kinds of attacks are common. For example, large businesses like British Airways, TalkTalk and Capital One experienced serious data breaches over the past few years that negatively impacted their reputation and in the case of Capital One, their and financial standing. These cyberattacks are all quite costly. According to a recent IBM study, average costs of data breaches in the UK is £3.2M. To exacerbate the situation, there were a lot more data breaches in 2022 than there were in 2020. These startling figures highlight the need for financial data security to be a top focus for all financial industries, including accounting.
The Increase in Attacks Using Accounting Cybersecurity
You can’t afford to minimise the risks that cyber security poses to your sector. They are relentless and all-encompassing. For instance, there were 1,291 of these attacks in 2021 compared to 1,108 in 2020, and the situation did not get much better in 2022. Actually, hackers are developing increasingly complex exploits and releasing them on businesses of all types, but especially on financial institutions and accounting firms as they hold sensitive financial information. The UK and US financial services infrastructure is particularly susceptible to Russian cyberattacks, according to a recent analysis by Goldman Sachs economists. This may be a dire situation that costs the financial services business and accounting firms, as well as the transportation and energy sectors, millions of pounds.
It’s obvious that accounting businesses are a target. Cyberattacks have increased by 300% in the last two years. The situation is serious because, according to PwC, accounting and financing organisations are 30% more likely than other companies to experience a cyber-attack.
It’s obvious that the news isn’t good. Accounting companies must immediately adopt cybersecurity best practises because they are easy targets. Your company has to prioritise cybersecurity immediately if it hasn’t already – your business could be destroyed by one attack.
Why Is Cybersecurity in Accounting Important?
Cybersecurity is becoming more and more crucial in accounting. Accounting companies handle and store sensitive corporate information as well as important financial data whether on their own servers or cloud servers via a cloud based accounting software. You must therefore take extra care to keep yourself safe. The significance of taking proactive measures to secure your financial data is highlighted by the points that follow:
- There is a rise in cyberattacks: Every year, the number of cyberattacks increases. 33 billion records will have been stolen by 2023, according to estimates, a 175% rise from 2018 across the UK, US and EU.
- Hacking is simple to do in the right hands and requires very little training: Contrary to popular belief, not all hackers are computer wizards. Even someone with no technical expertise can successfully employ simple techniques like email phishing.
- Data from your clients and your organisation is at danger due to security breaches: A security breach can cause your company to suffer significant financial losses, but it can also result in the theft of a client’s data. A violation of this kind damages your reputation and exposes you to lawsuits from the impacted customers.
- Cyberattacks have the potential to permanently harm your reputation: It follows that if your data is compromised, your clients won’t want to do business with you anymore. Your reputation might eventually come back, but it might take years. Think about Equifax: their massive 2017 hack affected a lot of customers, and they still remember.
Your clients put their trust in you to maintain accurate financial records. Sensitive information may be stolen as a result of a financial data breach. Alternatively, the hacker might alter the client’s file, which could cause problems with reporting, tax filing, and other important services. You have lost everything if your company loses the trust of your clients.
The Importance of Cybersecurity in Accounting and the Possible Consequences of Hacking
Being the best accounting firm in the world won’t stop a cyberattack. Even if your company is the best in its industry, a damaging hack could nevertheless happen to you. You won’t get pity for being on the receiving end of such a crime; instead, you’ll probably face some serious repercussions.
Financial Loss: As previously mentioned, you might easily lose thousands of pounds in a single hack. The cost of additional security measures as well as the long-term financial implications are not included in that amount.
Client Loss: Customers will switch to a competitor if they don’t think your organisation is protecting their financial information. In fact, the loss of customers causes 60% of small businesses to shut down within six months following a data breach.
A Damaged Brand: The heart and soul of your company is your reputation. If you fall prey to cybercrime, the reputation of your business suffers. Customers will lose faith in your capacity to meet their demands, even though they might feel sorry for you. The most severe long-term impact of a financial data breach might be reputational damage.
Lower Workplace Morale: A data breach affects both you and your staff in a negative way. You might think that you have let down your customers. Additionally, it is detrimental to the culture of your company to worry about future violations and try to cast blame.
A data leak never leaves an organisation unharmed. Accounting cybersecurity is crucial because of this.
Risks to the Cybersecurity of Financial Data
Although there is a long list of cybersecurity dangers, many of these hacking techniques have been used for many years. While some are more advanced now, others continue to function because computer users have grown accustomed to and inattentive and get a little too relaxed thinking it won’t happen to them. Among the most frequent dangers are:
Phishing: Phishing is still one of the most popular and effective methods used by online criminals to obtain financial information. An official-looking email alerting you to the threat to one of your accounts and requesting account details to resolve the issue will be sent to you. You cannot access the websites of your bank, credit card company, or other businesses with the given web link. Rather, you are redirected to the hacker’s website, where your accounts will be accessed using your personal data.
Malware: Malware infiltrates your network through downloads, thumb drives, and other means. It manifests itself as harmful code or software. This “secret” virus has the ability to corrupt your data, apps, and operating system before you ever realise there is a problem. Easily transmitted among office computers, it poses a significant danger to network security.
Ransomware: Among the most expensive cyberattacks is ransomware. You won’t be able to access your system after a ransomware infection occurs on your network until you use an online payment method – typically bitcoin or another virtual currency – to pay the ransom. An encryption key is kept in the hands of cybercriminals until you comply with their requests. Naturally, there is no assurance that your system will be released, so paying the ransom is dangerous. Getting rid of ransomware from your machine might be almost impossible.
Spam: Emails that seem like advertisements for trustworthy goods and services are considered spam. However, there’s a chance that you’re downloading a virus when you click on a link or open an attachment, which might cause your computer to crash or steal your data.
How to Prevent Cybersecurity Threats to Financial Data
Often, the greatest defence against these cybersecurity risks consists of both enhanced security software protection and user behaviour changes. The following are some of the most effective methods for enhancing accounting cybersecurity:
- Recognise Your Dangers
It is important for you and your employees to be aware of both external and internal dangers. You must understand that unintentional employee data sharing and other careless practices might jeopardise the security of your financial data in addition to viruses, hacking, and ransomware.
- Offer Constant Instruction in Cybersecurity
It is not sufficient to discuss cybersecurity procedures with your employees once a year and call it a day. To keep your employees informed about emerging dangers and go through recommended practices for cybersecurity, you should schedule frequent training sessions. Training must be a continuous activity.
- Make use of a password organiser
Strong passwords must be lengthy and relatively complex. But employees find it hard to remember secure passwords, especially when they use several passwords every day. You and your employees may easily and securely create, manage, and store strong passwords with the help of a secure password management programme. You’ll save time and avoid frustration, and your data will stay protected.
- Demand the Use of Multi-Factor Authentication and Complex Passwords
Establishing a complicated password policy that calls for longer passwords including symbols, numbers, and characters is a good idea. Furthermore, mandating multi-factor authentication effectively adds another degree of security. This implies that the user will need to enter a code issued to their phone or email account in addition to a password in order to access their account. There should be a minimum of two ID verification techniques used.
- Make a Cloud Accounting Data Backup
Utilising the cloud is insufficient. To ensure that important data is not lost in the event that your account is compromised, you should backup your cloud accounting data multiple times per month. It’s simple to find software that will automatically backup your cloud accounts and ensure that you never lose data – and also ask if the cloud provider backs up the data and how often.
- Carry out penetration tests and audits
Acknowledge the fact that you cannot secure your technology on your own. To find vulnerabilities in your hardware and software, you should have an outside party audit them. Penetration testing, in which a professional attempts to break into your system to find and solve any issues, should be a frequent part of your process.
- Always use high levels of encryption
When providing data to a third party through email, many accounting companies encrypt the communication. Encryption should always be used for data that is stored, on devices, and at rest if you want complete security. Put simply, never leave any data unguarded.
- Strengthened Network Defence
The most recent security features should be installed on your accounting company network. These features include next-generation firewalls, which can swiftly identify hackers and stop breaches before any data is lost.
- Manage System Entry
Limiting employee access to systems and data so that only those who require it to perform their duties may do so is a major component of accounting cybersecurity. To avoid confusion when an employee leaves, you will need to develop access guidelines categorised by job title or group.
- Make Updates
In order to address vulnerabilities that hackers may exploit, manufacturers frequently upgrade their hardware and software. To ensure that you are protected from cybercriminals, make sure that your hardware and software are updated automatically.
Here at Itas Solutions, we recommend Sage Intacct as the best accounting software for mid to large companies, not only for its functionality, but for its high levels of built in security features.
If you would like to know more about Intacct and how it can be effectively used, please contact us.
About Us
At Itass Solutions, we know that Sage Intacct is a fantastic tool for financial management and secure accounting practices. We love it because of the types of different reports the system generates, the cloud-based accounting solution, multiple users can use the system at the same time and integration with other business systems means we’re big fans of Intacct.
Itas Solutions started off serving one client in 1995 and now services over 200 businesses across the UK. We are always available to assist our clients.
Itas is a business that our customers have trusted for more than 20 years, and we have expanded thanks to recommendations from them and IT professionals who value our educated but personalised service.
To discover more about how Itas can help your business with finance automation, Sage implementation, and increased purchasing management, contact us at info@itassolutions.co.uk, or phone us on +44 (0) 1824 780 000.
