How to Protect Client Data During Tax Season

This time of year, accounting firms are experiencing an increased flow of personal data. Don’t let the influx drown you or cause your security protocols to slack. By properly storing data and taking appropriate measures to secure it, you’ll stay above water and comply with your regulatory responsibilities.

Cyberattacks have become a fact of life, and it’s safe to assume you’ve already been the target of past breach attempts. The potential damage of a hack warrants enough concern for every firm to roll out sound defense strategies. Data breaches can lead to system downtime, loss of goodwill, and client churn. Here are three ways to prevent those outcomes:

Be proactive.If you wait to fall victim to a cyberattack before you think about how to respond to one, be prepared to lose data, infuriate clients, and suffer damage to your reputation. Having a plan for cyberattacks puts your firm in the best position possible to mitigate the impact if one transpires. In an interview about cybersecurity, former Homeland Security Chief Jeh Johnson said the third highest concern for firms should be “impressing upon the leadership team that cybersecurity has got to be a core priority of the business. Just like the protection of your physical infrastructure, it’s not just simply an information security concern that you pass off to your chief information officer. It is a core part of the business.”

He also said, “Too many of us are in a situation where we have to react to an incident. I would encourage in-house attorneys and senior legal officers to get out in front of an incident and ensure that their cyber defenses are as good as they can be. Not enough of our clients do that.” The bottom line is your firm needs to develop data breach processes and share them with stakeholders.

Turn to the experts.If you’re rolling out security practices for the first time, entrust cyber experts to help you. Johnson commented, “Get a team of cyber experts and a sufficient level of cyber capability that can provide some sophisticated level of defense.” Make this team responsible for encryption and backups, which enable your firm to render stolen data useless if it falls into the wrong hands. Keep network administration rights in the hands of this team and task them with setting up anti-malware and firewall software.

Deploy a multilayer system to protect data. Securing your hardware is the first step. Use complex passwords, attach computers to desks, and install “Find my device” technology on all devices. Next, educate your employees on how they can protect your data. Insider threats make up nearly 75% of security incidents. Training your staff on their role in securing data will go a long way. Teach employees not to share passwords and not to use unsecured networks or websites. Lastly, consider purchasing cyber security insurance. If all else fails and you’re covered under insurance, the costs of a breach will be much lower than it’d be without coverage.

There’s no one-size-fits-all approach for protecting data, but by analyzing your vulnerabilities and developing a plan to address them you’ll be off to a great place to start. Trust the experts as you build a security process and share the information with stakeholders. By taking the steps above, you’ll keep sensitive data as safe as possible year-round.