Navin is an experienced finance and accounting (F&A) operations specialist with 20 years in the outsourcing industry. He has strategically led the development of several workflows, reconciliations, process re-engineering, operations management tools, and setting up greenfield operations like Payroll and Financial Research.
The only constant is ‘change’. As proof, we can say that the world moved from physical to digital during the pandemic. The businesses also adapted to new operational paradigms and this paradigm shift introduced the world to new challenges of cybersecurity issues. Cybersecurity issues have increased significantly around the world. The increased deployment of technology in business operations and remote working trends that have become a mainstay during the Pandemic are primarily to be held liable. Cybercrime increased by 600% during COVID-19 Pandemic. In the first three months of 2022, India experienced over 18 million cyber intrusions and threats.
Data breaches are high on the rise. Firms and employees who are desperately seeking information are more prone to fall into its traps. Although data breaches have been experienced across all the industries, breaches for accounting firms have been more on the rise lately. As per Accounting today, accounting firms experienced a 300% rise in data theft since the onset of Covid-19. While automation of repetitive tasks in accounting has made it easier to access and manage the accounts, it has also made the financial data vulnerable to theft. Electronic documents possess a great risk for data and information theft. Accounting cybersecurity is a developing concern, primarily for the financial data which is a key target of hackers.
Both external and internal factors can be accounted for in data theft. Hackers from outside the organisation are as perilous as employees within the organisation who can make the data prone to risk, whether deliberately or accidentally is another concern. Data from accounting and bookkeeping is valuable to hackers due to the details that it provides. Especially details like Account numbers, Transaction details, Credit card numbers, Bank accounts, Usernames, Passwords and Personal and private information that can put the privacy of many people at risk.
Large enterprises are supposed to be more prone, especially because high-profile businesses like Deloitte and PwC have been previously exposed to data breaches. But they aren’t the only ones to fall into data breach traps. It is very true in the case of small and medium-scale enterprises as well, more so because their systems are easier to crack. An Inc. article stated, 60 percent of small and medium-sized enterprises that were hacked, failed within six months. This is so because larger firms have enough resources to increase their investment in security concerns but small businesses lack sufficient resources.
Accounting cybersecurity vulnerabilities provide considerable risks if they are not addressed promptly. Accounting businesses risk losing money, clients, and reputation if they do not implement strong safeguards. A cyberattack can lead to exorbitant charges of alerting clients, assessing the attack, remediating the firm, and paying for monitoring, while accounts are still held by ransomware. According to a new report, cyber-attacks on key infrastructure have escalated considerably. India alone experienced a 70% spike in ransomware activity in Q4 of 2021.
Ransomware, phishing and viruses are the 3 main methods used for stealing data. Therefore, IT teams and accountants must look into ways to safeguard sensitive data. The use of personal devices, and unsecured wifi networks make data more vulnerable to interceptions by criminals. Accounting businesses must be aware of the dangers of working from home and must take efforts to reduce them. This can be done by connecting to business networks through a VPN, accessing work data only on safe, password-protected devices, and never sending passwords or sensitive information over email.
To fight phishing attempts, workers must be comprehensively trained and phishing tests must also be performed. Two-factor authentication for hard drives can increase security, and single software subscriptions should be used to prevent hackers further. Regular software updates, regular accountants training, restricted access to data, cybersecurity insurance, education about cyber attacks and cyber frauds, etc. are some other ways to curb data breaches.
Outsourcing accounting can secure businesses from a data breach by letting professionals take over the accounts. Such firms having a presence in the market for providing accounting services thus, they will be least expected to defect. For example, Corient, an outsourced accounting provider, undertakes multi-level security measures to secure its clients’ data. It takes steps such as limiting data access authority, controlling data transfers to external sources, banning portable storage devices on workstations, and working 24 hours a day, seven days a week under CCTV surveillance.
Any disruption to an accountant’s business would be detrimental — both financially and reputationally. When securing your accountancy firm’s data, methods to prevent data theft are always better than remedies after the theft. Robust cyber security can be internally strategized or outsourced.
Cybercrime is expected to cost the globe $10.5 trillion per year by 2025. The yearly worldwide cost of cybercrime is estimated to exceed $6 trillion. To close vulnerability gaps, proactive measures must be implemented. Immediate attention to security needs in accounting will pave the way for secured data for both firms and their clients. And, as said, ‘change’ is the only constant therefore, accounting will have to become secure to keep up with this challenge of cyber security.