Finance and mortgage brokers are being warned not to underestimate the risk of cyber attacks.
The Finance Brokers Association of Australia (FBAA) has advised its members to prioritise robust data security measures and to consider obtaining specialist cybersecurity insurance.
FBAA Managing Director Peter White (pictured above) stressed that typical professional indemnity (PI) insurance may not suffice in the event of ransomware or other cyber incidents.
“We are advising our members that their PI insurance won’t be enough if they are the victim of a ransomware or other cyber attack, and I think this is a message that should be sent to the wider broking community,” White said.
Insurance Advisernet, an FBAA-endorsed PI provider, noted that while some PI policies might cover notification expenses after a cyber event, they do not address major risks such as data loss, ransom demands, and business interruptions.
According to the Australian Signals Directorate’s latest cyber threat report, the 2022-23 financial year saw nearly 94,000 cybercrime reports, or around one every six minutes. The financial cost of these crimes is also rising, with the average loss for small businesses climbing 14% to $46,000 and to $97,200 for medium-sized businesses, the same report found.
The financial and insurance sectors are particularly vulnerable, with these industries being the fourth most targeted for cybercrimes in Australia.
Darren Loades from Insurance Advisernet said that all sizes of brokerages are susceptible to cyber attacks, which can be devastating.
White emphasised that taking necessary precautions against cyber attacks is simply common sense. However, he noted that if an attack occurs, it’s crucial to have cyber specialists on hand to address and resolve the issue.
“These specialists cost a small fortune, so this is why we are urging brokers to get specialty cyber insurance cover,” he said.
White said that risks are escalating, and cautioned finance and mortgage brokers against the complacent belief that “it won’t happen to me.”
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