A breach or ransomware attach at your RIA will result in a cost to many different sides of your business. There are some obvious impacts, but there are also some often overlooked areas that you should be aware of.
Depending on the type of breach and what was compromised, you may be facing a series of financial payments as a result.
- You may incur regulatory fines or penalties from the SEC or other bodies
- Ransomware payments can range from 10’s of thousands to even millions
- An investigation into the breach, how it happened, and what was compromised may also be necessary and can be costly
- IT costs to “stop the bleeding” and repair your systems will likely require outside consultants or specialists if your IT service provider doesn’t have the expertise to manage it themselves
- If personal information about your clients, partners, or employees was exposed, you likely have an obligation to inform them and there may be instances where financial compensation will be required
- You may require legal council to help manage everything
Your firm is likely to experience operational downtime due to the breach. How long and how widespread the downtime is will depend on the severity of the breach, your backup and recovery system, and the skill of your IT service provider.
- You can experience a loss of productivity and revenue when your network is shut down
- Ransomware can lock you out of your system for hours, days, or weeks
- You will experience a shutdown for the rebuild of your system which can be quick if your backup and recovery is enterprise-level, or days or weeks if it’s notli>
- The damage to your reputation will impact your client and partner confidence and could result in lost clients and revenue
- Employees may lose confidence in the firm or move on due to the “belt-tightening” to make up for the cost of the breach
- Many RIAs struggle to recover from a breach, leading to layoffs or even shutting down the business altogether
The best way to minimize the cost of a breach is to not let it happen in the first place. You do that by staying on top of your security infrastructure and training your employees to spot the risks and avoid them. A good place to start is with checking your Microsoft Secure Score – Microsoft’s snapshot of how well your firm is implementing best practices. Check your score and then if you have questions about security at your RIA, contact us for a discussion or a quote today.