Republished from CU Times online dated March 1, 2018. By Mark Pribish and Jim McCabe.
In light of last September’s Equifax data breach event – along with new proposed cybersecurity legislation – credit unions have an opportunity to enhance their cybersecurity best practices and generate residual non-interest income by offering identity theft and breach response services to its members.
Here are four lessons learned from the Equifax breach that can help protect your members and credit union:
Lesson #1 “the Equifax Affect,” no company can fully prevent a data breach from happening. Even Equifax, with more financial and IT resources than most companies in the U.S., wasn’t able to prevent a data breach from occuring.
In Equifax’s case, their data breach event affected 145 million U.S. consumers where information breached included names, Social Security numbers, birth dates, addresses and, in some instances, driver's license numbers and more.
Lesson #2 “response and recovery,” where Equifax failed in multiple ways to respond in a timely and responsible manner. First, and with irony, the Equifax breach happened because the company failed to fix a software flaw that federal officials had warned about months before. But to make matters worse, Equifax waited nearly six weeks to notify the public after learning of the hacking event.
When this crisis happened, Equifax’s failed management response resulted in its chief information officer and chief security officer “stepping down” and its CEO “retiring.”
Lesson #3 “the future of cybersecurity laws” could include the potential for criminal action for officers and board members of any size organization. CSOonline.com released an article titled The year ahead in cybersecurity law, where CSO states that “major legal cases and proposed state and federal legislation will shape how companies respond to and attempt to mitigate cybersecurity and data privacy risks.”
Lesson #4 “industry best practices should include response and recovery” as Risk and Insurance Magazine highlights in this article titled Cyber Threat Will Get More Difficult, where General Michael Hayden, former head of the Central Intelligence Agency and National Security Agency, and current principal at the security consultant the Chertoff Group, stated that “companies should focus on response, resiliency and recovery when it comes to cyber risks.”
According to Hayden, “companies are focusing on the vulnerability aspect, and responding by building high walls and deep moats to keep attackers out.” He said “If you do that successfully, it will prevent 80 percent of the attackers.”
“But that still leaves 20 percent vulnerability, so companies need to focus on the consequences: It’s about response, resiliency and recovery,” said Hayden.
In an era of growing data breach risks, credit unions that offer data breach “response” services to their business accounts can differentiate themselves. These unique data breach recovery services can help to attract and retain business accounts, which will incrementally grow revenues.
All businesses need strong document management policies and since financial institutions are particularly targeted by criminals, credit unions need strong data breach response solutions themselves to help protect the institution, their members, staff and board of directors.
For all these reasons noted above, complying with NCUA Supervisory Priorities for greater cybersecurity preparedness needs to be the top priority for credit unions. This will help credit unions avoid the “Equifax nightmare” and create the basis for the ultimate response to any data breach “when” it happens. Credit unions must search and find solutions that will not only address cybersecurity preparedness, but also generate new income streams…because cybersecurity preparedness isn’t cheap.
Mark Pribish (email@example.com) is the VP and ID Theft Practice Leader at Merchants Information Solutions, Inc., a leading ID theft and data breach services firm based in Phoenix, AZ. He has authored hundreds of articles and white papers and is frequently interviewed by local and national media as an identity theft and data breach risk management expert.
Jim McCabe (firstname.lastname@example.org) is the SVP, Identity Theft Solutions, Vero, LLC, a subsidiary company of CU Direct. Jim has developed his subject matter expertise in ID theft & data breach solutions and has contributed to industry publications & blog sites, while consistently speaking for conferences & webinars to foster awareness & education of best practices.
Request a WebEx by Vero to learn about unique solutions to maximize the preparedness of your CU, improve member value, and potentially increase non-interest income.