Banks have to be well-oiled machines in order to meet the demands of their clients and customers on a daily basis. There are a million things going on inside corporate offices, loan departments, and suburban bank branches across the country. Pull one block out and the ripple effect could be huge. One thing that banks don’t want to have to deal with is negligence claims on account of employees who failed to meet their responsibilities.
With so much at stake when it comes to sensitive information being lost, stolen or shared unnecessarily, negligence in banking has led to major issues and long-lasting repercussions. Here’s a look at some of the ways in which negligence pops up in the workplace and how to prevent it.
Casual negligence, or ordinary negligence, means that a simple lapse ended up leading to something like a data breach, as noted above, or theft or possibly even a personal injury to a customer. Liability does not usually extend to ordinary negligence, but someone must be free of ordinary negligence to seek indemnity.
Employee negligence is a major cause of liability claims presented by customers and clients and accounts for the main cause of data breaches, according to a report by Shred-it, an information security company. The report found that cybersecurity negligence came to light through human error such as accidental loss of a device or document by an employee, or that an employee had opened the door to a data breach at their bank.
This kind of problem is becoming more and more common, especially as banks become more digitally dependent and accessible, such as through apps and artificial intelligence-based services. Fortunately, there are cyber liability insurance programs available for companies to browse, helping to keep their information safe, as well as their financials, following a breach of any kind or size. Cyber liability insurance can help to alleviate major stress due to employee negligence and cut down on downtime following an issue.
There should be rules and regulations in place at each office or work site that aims to cut down on liability issues related to negligence. First, negligence at a financial institution can be cut down by simple steps and caretaking by employees. They can keep their computers password-protected and update them on a regular basis. Also, information should not be shared freely, such as through conversation or email or texting. Using simple measures will help to limit exposure to sensitive information dramatically.
Another way in which negligence can be limited, especially in terms of cybersecurity, is through employee training, especially for remote workers. Adding the provision of security awareness training will help to ensure that workers are aware of the organization’s policies and processes and are educated on the best security practices.
Having banking and financial institution employees take more care of their daily cybersecurity processes will be a big step toward ensuring a safe digital presence. Training sessions can be scheduled on a regular basis and present real-world scenarios in which taking even the smallest of shortcuts can make for major problems down the road.
About Financial Guaranty Insurance Brokers
Since 1983, Financial Guaranty Insurance Brokers has distinguished itself as a provider of Professional Liability, Cyber Liability, and Crime insurance products for entities of all types. To receive timely, personalized service from a knowledgeable and experienced staff, call us today at (626) 793-3330 to speak with one of our professionals.