Managing sensitive company information is a growing challenge. Multiple departments share the responsibility to protect your data, but most of it falls on the human resources teams who collect and use employee data for their jobs – particularly for benefits administration processes.
Employee data is extremely sensitive and valuable, leaving your company with an inherent responsibility to take appropriate steps to shore up cybersecurity protocols. While many businesses know this, putting cybersecurity into practice can be easier said than done.
In addition, not all businesses understand all of their points of vulnerability in their administration systems – or how to protect them effectively. If you want a secure company, you can’t overlook your benefits administration processes.
The Value of Employee Benefits Data
Employees release a lot of sensitive data to their employers through data sharing. This is especially true during open enrolment periods. While this is necessary for human resources to do their jobs, this information is extremely valuable to cybercriminals for several reasons:
Personal Information of Employees
The personal information of employees, also known as personal identifiable information (PII), is a desirable prize for cybercriminals. They can use the information to steal people’s identities, gain access to their finances, or ransom the information for money. PII may include names, addresses, phone numbers, bank account information, credit card information, and more. When it’s in a cybercriminal’s hands, they can wreak havoc on your employee’s finances and wellbeing.
Sensitive Financial Information
The benefits enrolment process often includes collecting and storing sensitive financial data that’s used for direct deposits. In some cases, credit card details may be used for premium payments, adding to the financial risks. If cybercriminals get access to an unsecured system, this financial data gives them everything they need to exploit your employees.
Cybercriminals can use stolen bank account information to redirect payroll deposits or benefit payments to their own accounts. They also have details about your employees’ finances, allowing them to calculate fraudulent tax returns, manipulate tax withholdings, and more. If they have credit card information, they can use it to open lines of credit or make purchases in your employee’s name, damaging their credit and leaving them on the hook for the money.
Access to Business Credentials
The risk of benefits administration with cybercrime isn’t just about your employees. They can gain a lot of valuable information about your employees, but there are also risks to your company. Cybercriminals can leverage the stolen information to launch phishing campaigns, impersonate employees, or disrupt business processes related to benefits enrolment.
If a cybercriminal gains access to the systems that manage benefits information, they may have an opportunity to manipulate benefits selection, process fraudulent claims, or gather credentials to gain access to other parts of your system. As a result, you may face significant financial, operational, and reputational damage.
Common Risks Associated with Benefits Administration
Benefits administration processes can leave your system and employee data vulnerable to cybercriminals. Here are the common risks associated with benefits administration:
- Inadequate Security Protocols of Third-Party Vendors
- Often, benefits administration involves relationships with third-party vendors like insurance providers, payroll service providers, and benefits brokers. No matter how many cybersecurity solutions you have in place, you’re still vulnerable if your third-party vendors aren’t on the same page with protecting data.
- A cybercriminal can gain access to your system through your third-party vendors’ vulnerabilities. If a vendor experiences a breach, it can ripple through all the vendor partners because these systems are interconnected, leaving a path of sensitive data that the criminal simply needs to follow.
- Poor Access Controls
Employees can be an asset with cybersecurity, but there’s also a potential point of vulnerability. It’s common for companies to create self-service employee portals to streamline the benefits enrolment process or allow employees to access plan information. While this helpful for employees, the credentials they need can be a point of entry for cybercriminals.
It’s common for people to rely on weak passwords that they can remember easily, which happen to be easy for cybercriminals as well. If they use weak passwords and skip vital cybersecurity measures like multi-factor authentication, it’s much easier for cybercriminals to exploit these vulnerabilities and access sensitive data.
Legacy Software
The benefits administration system may include legacy software and hardware, which is another common vulnerability that leaves your system exposed to cybercrime. In many cases, businesses lack the resources or experience to identify outdated systems, leaving them at risk of a breach. Worse yet, if you skip regular patches and updates – many of which are important for cybersecurity – you’re making it easier for cybercriminals to attack.
If you delay updating some of your more critical systems to avoid downtime, you’re putting your business in a dangerous situation that cybercriminals can exploit. Cybercriminals are sophisticated and know where to look for vulnerabilities, and this is a great way to compromise an entire system.
Employee and Administrator Errors
Human resources teams can be the weakest link in the security chain. Phishing attacks, reusing passwords across systems, and choosing weak credentials can pose a real threat to your business.
Employee training needs to be part of your cybersecurity protocol. It doesn’t matter how sophisticated your cybersecurity efforts are if your employees are leaving you vulnerable to breaches caused by lack of awareness or human error.
How to Keep Your Benefits Administration Processes More Secure
No matter the size of your organisation, cybersecurity best practices can be used to reduce your risk and limit your vulnerabilities. Here are some steps you should take to protect your business:
Conduct a Risk Assessment
Risk assessments can help your business identify any potential threats or vulnerabilities within your benefits administration processes. Your risk assessment should be broad, including both internal risks and external threats from third-party vendor security practices.
A thorough assessment is a crucial part of understanding your current risk profile and recognising areas that need to be prioritised in your cybersecurity plan.
Encrypt All of Your Data
Data encryption is a vital tool to protect sensitive digital information like employee benefits data. You should encrypt data at rest, or when it’s stored, and in transit, or when it’s being shared between systems. Covering both bases makes unauthorised access more difficult if a breach occurs.
If a cybercriminal does manage to steal data, an effective data encryption strategy makes stolen data virtually useless to the criminal. This can go a long way toward limiting the damage they can do.
Create an Incident Response Plan
Data breaches happen to even the most stringent of companies. It’s crucial for companies to have a well-defined incident response plan in place if a breach occurs. Your plan should outline the steps for investigating the incident, containing the breach, notifying all parties affected, and putting new strategies in place to prevent another breach in the future.
Regularly Train Employees
As a possible weak link in your business, employee awareness is a critical aspect of cybersecurity. Conduct regular cybersecurity training to teach your employees and human resources team how to identify phishing attempts and recognise suspicious activity. This will help them avoid breaches on their end and share some of the responsibility of protecting your company data.
Work with an Experienced Solutions Provider
Partnering with a reputable solutions provider gives you the expertise to implement effective and secure benefits technology solutions. Look for partners that specialise in benefits administration security. They can help you assess your vulnerabilities, create strong security measures, and assist with incident response if a breach occurs.
Make Data Security a Priority
Cybersecurity isn’t an afterthought. It should be one of the top priorities for your business and human resources team when it comes to benefits administration. Cybersecurity strategies and employee training can significantly reduce your cybersecurity risk and keep your sensitive business data secure.
Frank Mengert continues to find success by spotting opportunities where others see nothing. As the founder and CEO of ebm, a leading provider of employee benefits solutions. Frank has built the business by bridging the gap between insurance and technology driven solutions for brokers, consultants, carriers, and employers nationwide.