Navigating Payment Data Security In The Insurance World
In the insurance world, data security is paramount, especially when considering the critical domain of billing and payments. If you work in the industry, you need to protect your clients' sensitive information—including financial data and transactional records—from unauthorized access and potential breaches. Any lapse in cybersecurity around payment processing systems could lead to fraudulent transactions or manipulations in billing, further increasing the financial risks to both the company and clients. The consequences of failing to do so can be severe, including financial penalties, legal issues, damaged reputations and loss of customer trust.
In this article, I will explore the importance of payment data security in the insurance industry and discuss ways you can protect your company from cyber threats.
A Major Target
The insurance industry is a favorite target for cybercriminals due to the immense value of its data. With the industry worth over $6 trillion and growing steadily, hackers see it as a lucrative opportunity. According to a 2022 IBM report, the average cost of a cyber breach in the U.S. is higher than any other country studied, at $9.44 million. As cybercriminals become more sophisticated, insurance companies must prioritize strengthening their digital defenses and protecting against cyber threats.
Cyberattacks can have devastating consequences. Take ransomware attacks, for example. A ransomware attack targeting your company's billing system could severely disrupt your payment processing and billing operations. When your billing system is paralyzed, you may be unable to generate invoices, process premium payments or disburse claim payments, leading to revenue loss and delayed transactions.
Ransomware attacks often involve data breaches, and in the case of insurance payment systems, sensitive customer information, financial data and billing records could be exposed. This could lead to legal and regulatory repercussions. An attack could also disrupt your day-to-day operations, causing delays in policy issuance, premium collections and claims processing. A successful ransomware attack could also severely hurt your company's reputation. Clients may lose trust in your ability to protect their data and financial information.
The Regs You Need To Know
The insurance industry is subject to various regulatory requirements around data security in the payment process. These regulations provide guidelines and standards for data protection. Key regulations you should know include:
• Health Insurance Portability and Accountability Act: HIPAA ensures the privacy of health insurance information and mandates guidelines for sharing medical information with claims handlers and healthcare providers. Regarding billing and payment statements, HIPAA mandates that insurance must take adequate measures to protect the confidentiality of patients' sensitive data. This includes ensuring that only authorized personnel have access to protected health information, implementing strong data encryption and authentication protocols, and maintaining stringent audit trails to track information access.
• Gramm-Leach-Bliley Act: GLBA requires financial institutions to protect customer information, such as credit card details and account balances, while empowering customers with certain rights over their data.
• Payment Card Industry Data Security Standard: PCI DSS is a set of standards that safeguard credit card data by implementing network security protocols, limiting access to sensitive information and conducting regular security checks.
Best Practices For Payment Security
While the insurance industry may not always be at the forefront of technological advancements, there are basic strategies you can use to protect your company's data.
To safeguard billing and payment systems against cyberattacks, you can set up strict access controls so your sensitive payment and billing data can only be seen by authorized parties. Implementing a principle of least privilege can be particularly effective. Under this principle, employees are granted the minimum access levels necessary to complete their tasks. This minimizes the number of potential entry points for cybercriminals and reduces the potential damage from internal threats. And don't forget to audit these controls and monitor for unusual activity.
You should also make sure you have robust encryption protocols for all financial transactions. Encryption ensures that the data being transferred is unreadable to anyone without the correct decryption key, making it highly challenging for cyber criminals to intercept and exploit this information.
Ensuring stable and secure backups of payment and billing data can help your company recover swiftly if it experiences a breach, minimizing disruption to operations and mitigating the risk of data loss.
Data protection is vital in the insurance industry, given the increasing reliance on digital systems and customers' growing awareness regarding their data security. Make sure your company prioritizes data security to protect its clients' sensitive information, maintain regulatory compliance and uphold its reputation. By implementing best practices and adhering to regulatory requirements, you can help protect your company from cyberattacks.
This article originally published on Forbes on August 21, 2023.