Although no industry is immune to data breaches and employee identity theft, some are bigger targets than others. Institutes within the financial and insurance industries are particularly vulnerable. Let’s take a closer look at why this is the case, as well as how companies can better protect their employees, partners, and customers.
Data breaches, security incidents, and identity theft statistics
The financial and insurance industries experienced nearly 600 security incidents and 146 confirmed data breaches in 2017. Unlike other industries, the vast majority of security and data breaches were caused by external threats. In total, 92 percent of threats originated from outside the affected companies.
The compromised data consisted of the following:
36 percent personal details
34 percent payment details
17 percent miscellaneous details
13 percent banking details
The economic impact of synthetic identity fraud
Bank fraud is now the fourth-most popular type of identity theft. In 2017, there were more than 50,000 documented cases. That same year, the number of identity theft cases involving loans or leases exceeded 30,000.
Financial institutions particularly take a significant hit when it comes to a relatively new form of identity theft — synthetic identity fraud. To better understand the unique challenges synthetic identity fraud poses banks and brokerages, let’s look at how the process works.
Often, it begins when a criminal apprehends a victim’s personal data, such as a Social Security number. The fraudster then attaches that information to a fake profile that includes both real and fictional elements. This combination of details makes it incredibly difficult for a victim to discover. As a result, thieves can spend years building up this fake persona’s credit for a huge financial reward down the line.
This has a tremendous impact on a financial institution’s bottom line. It’s estimated that in 2016 alone, synthetic identity theft may have cost financial institutions around $6 billion. That means it could account for five percent of all uncollected debt, and as much as 20 percent of all credit losses.
Even more concerning, just 14 percent of treasury and finance executives report being “significantly prepared” to manage the risks associated with new technology, including tools identity thieves and hackers use to penetrate financial and insurance industries.
Reasons why identity thieves target employees in the financial and insurance industries
Financial and insurance institutions must store a treasure trove of personal details and banking information on each customer and client. When you couple this with the fact that employees typically have access to thousands (and sometimes millions) of account records, there’s no wonder why they are among the most targeted employees on Earth.
It’s not just cybercriminals who are looking to cash in, either. Foreign governments are also trying to profit from the data financial and insurance institutes collect. In fact, espionage ranks as the second-most popular motivation for attacks.
Regardless of motivation, if an evil-doer can steal the identity of a worker in the finance or insurance industry, they can more easily phish the victim’s co-workers, contacts, and even clients.
Creating a more secure world
If you’re a benefits broker with clients in the financial or insurance industry, you can help protect their interests by adding employee identity protection to your portfolio. If you’d like to learn the difference identity protection can make for your clients, or if you’d like to learn why PrivacyArmor is the preferred provider for millions of employees, you can download our guide, How Data Breaches and Identity Theft Affect the Financial and Insurance Industries.