Cyber pirates are sailing the seven seas looking for weak ships filled with treasure to plunder. Today’s pirates steal customer data and use this data to plunder the customer accounts. Or they “commandeer the ship” by disabling the bank’s technology infrastructure and collect a ransom. Community banks are increasingly becoming the next high-value targets for cyber pirates. Community banks simply don’t have the adequate resources to effectively fend off pirates and protect their customer data.
There is a better strategy. Form a community bank owned captive insurance company that is dedicated exclusively toward managing cyber risk and defending against cyber pirates. The bank captive insurance company purchases reinsurance wholesale directly from carriers without the traditional carrier markup of up to 40%. The bank captive insurance company adopts, shares and implements best-practices among all members to reduce the likelihood of experiencing loss.
This strategy won’t stop cyber piracy. But it will make it less attractive for pirates to target and board your bank and encourage them to select another weaker, less prepared target.
Kelly Coughlin, CPA, is the CEO of BankBosun. He is the program host of the syndicated audio podcast BankBosun.com, helping bank C-Suite Officers navigate risk and discover reward in the banking ecosystem. Kelly specializes in helping community bank manage three Rs: Risk, Revenue and Regulatory challenges.
Contact Kelly Coughlin at: kellycoughlin[at]bankbosun[dot]com or 646-494-[five-four-one-two]
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