Businesses urged to take action as FCA prepares huge penalty
The Financial Conduct Authority (FCA) has fined Tesco Bank £16.4m for its failure to protect customers from a cyber attack incident in November…
The Financial Conduct Authority (FCA) has fined Tesco Bank £16.4m for its failure to protect customers from a cyber attack incident in November 2016, in news that will strike fear into businesses.
Mark Brenlund, partner, said:
"A fine of this size, for an incident involving a relatively small number of Tesco Bank customers, is a major statement of intent from the FCA and of massive concern to the wider banking sector.
"But alarm bells should also be ringing in the boardrooms of any business which handles large volumes of customer data, not just those in the financial services sector. A fine of this level will raise the bar for the Information Commissioner’s Office (ICO) too, adding pressure for it to respond with similar strength to future data breaches.
"This is likely to lead to further acknowledgment by the public of the importance of data which is bound to lead to a rise in claims following a breach. Consequently we are likely to experience a step change in the take-up of cyber insurance policies by businesses, as they seek protection from the fall out of increasingly common cyber attacks.
"Now is the time for businesses to stress test their I.T. system and security processes failing which the likelihood of a successful attack will increase meaning, if such an event occurred, so too would the cost of insurance coverage."