Originally posted on forwardbanker.com.
The 2014 Deluxe Exchange Conference offers crucial advice on the most pressing topics in financial services. Use code NASC14 to register »
”Life is 10 percent what happens to you and 90 percent how you respond to it.”
This famous quote from Lou Holtz, a college football coaching legend, applies to your role in helping your small business customers with the problem of fraud.
Fraudsters are increasingly targeting small businesses. Consider these statistics: (1) 95 percent of all VISA credit card data breaches involve small businesses, (2) 73 percent of small businesses were hit by a cyber attack in 2011.
Why are small businesses an attractive target?
• There are over 27 million small businesses (<100 employees) for fraudsters to target.
• They have more financial assets to exploit than the average consumer.
• They also store and maintain customer data.
• In general, they are not as sophisticated as larger companies in protecting their assets.
• They lack the time, money and expertise put in place a sufficient security infrastructure and internal safeguards.
Fraudsters, like any other criminal, look for the path of least resistance. Because small businesses typically haven’t taken basic security considerations into account, fraudsters see them as an attractive target.
Knowing this, what should they do?
The Verizon Data Breach Investigations Report suggests that most data breaches are preventable through simple or intermediate controls:
• Instituting security policies and procedures that all staff must follow
• Creating stronger passwords for access to systems
• Creating a system of check and balances and not leaving all the responsibility in the hands of one person
• Training employees on what to do in the event of a breach
But small businesses, just like consumers, expect their financial institution to help them address and avoid the harmful consequences of fraud (Ponemon Institute report commissioned by Guardian Analytics, Business Banking Trust Study). When they don’t receive assistance, they will lose trust and confidence in their banking relationship if just one successful fraud attack occurs.
• Educate your small business customers on the risks and ways they can combat.
• Assess their security infrastructure and internal safeguards.
• Based on the assessment, help them create security practices and procedures.
• Respond and recover to any instance of fraud.
This is a great way to partner with your small business customers and become indispensable to their operations.
So how will you respond? Will you stand by and watch as your small business customers struggle to effectively combat fraud, or will you step in to assist? Your response will say a lot to your customers about your financial institution.
Deluxe Financial Services is the NAFCU Services Preferred Partner for Check Printing, Online Check Ordering, Check Fraud Prevention, and Member Loyalty Solutions. More educational resources and contact information are available at www.nafcu.org/Deluxe.
Also available: Use Member Retention to Improve Your Bottom Line (Podcast) »