Cyber crime: the risk to revenue and reputation for brokers.

Cyber security has become the hot topic for small businesses as the hacker community gets bigger, their knowledge more sophisticated, and their scams more believable.

As seen over the last 12 months, illegally obtained data can be sold on the dark web leading to identity theft, fraud, and financial loss for customers.

For brokers, a data breach poses long-lasting damage to their reputation. Existing customers will lose trust while new clients will unlikely share their information with them.

Data breaches can also result in costly fines and sanctions from the regulator for failure to meet data protection requirements. In addition, a data breach can result in significant direct costs such as the cost of investigating and remediating the breach, as well as potential legal costs if the breach resulted from negligence.

As the market’s preference for brokers increases - 71.7% of home loans originated in the six months to September were through brokers (MFAA) - business owners need to be proactive in mitigating the risk posed by scams and data loss from online breaches.

Tech and personal support to stay safe in the digital world

LMG has assembled one the largest aggregator-owned dedicated compliance teams with 10 Compliance Consultants Australia-wide.

The Compliance Consultants keep brokers safe in their file handling and client management processes by:

• addressing process issues at a granular level before they become reportable;
• monitoring real-time compliance reporting to ensure brokers follow the Group’s industry-recognised processing blueprint;
• outlining how compliance directly benefits productivity and the customer experience.

In tandem with MyCRM’s tech, which does the heavy-lifting in lodging under Best Interests Duty (BID), the Consultants keep brokers safe in their day-to-day client engagement.

But the Compliance Consultants also help brokers stay safe in the evolving challenge of cybersecurity.

LMG’s Compliance Consultants help Members, Partners and Loan Market businesses understand the gaps that hackers look for in a business’ digital presence.

Consultants offer multi-tiered support around cyber security:

• educating brokers on regulatory requirements for the protection of data;
• updating checklists within MyCRM’s learning Hub showing brokers how to spot email and SMS phishing scams, ransomware and exchanging information on public WiFi, and;
• if needed, they act as a conduit with LMG’s IT Security team to help businesses fortify their online activity.

Compliance and cyber security are branches of risk management: both have deep roots in process.

“At every professional development day, business owners are wanting to know how they can protect themselves against a data breach,” said David McQueen, LMG Chief Risk Officer.

“Awareness of cybersecurity is front and centre, especially around business scams and the protection of client information.

“The high-profile data breaches of the last 12 months have amplified the issue and, as brokers deal with a lot of client data, business owners recognise the need to be proactive in protecting themselves and their customers.”

LMG’s investment in Compliance Consultants has been well-received by brokers in the current landscape. The specialist team members averaged 22.8 out of 25 for service in a questionnaire completed by business owners.

“The compliance consultant was very welcoming and addressed all my concerns with ease. I must say the compliance consultant system (where (the) broker has dedicated compliance support) gives me so much comfort and assurance. This is certainly a big USP with LMG.” - Feedback from a surveyed broker.

Mr McQueen said: “Brokers need to be proactive in protecting their businesses and cyber security is an ever-changing challenge in this space”.

“From seemingly credible messages that are phishing for email passwords through to text messages spoofing the phone number of their bank, there are many threats that business owners face everyday.

“They need to know how to spot a threat and have their wits about them in their online activity.

“They need to have a close look at where potential gaps are in their digital network. Data sharing is critical for brokers in terms of productivity, but also in terms of insights and modelling that delivers customers the very best outcome possible”.

“Unfortunately, we live in a world where unscrupulous actors look to undermine the relationship between small business owners and their clients for criminal gains.

“At LMG, we treat cyber security as a priority so our brokers can work safely and productively for their clients.”

How can a broker spot a scam?

• If you receive an SMS or phone number to call, don't use it - instead, call your bank directly using a number you know or have looked up independently.
• Hang up if you get a call from someone claiming to be your bank and asking you to transfer funds.
• Always ask for a reference number and call your bank for details you find independently.
• Never provide online banking passwords, one-time security codes, pins or tokens over the phone or via any other method.
• Never click on links in text messages.
• Contact your bank immediately if you think you've been scammed.
• No matter how urgent these calls or texts may seem, a bank will never ask you to transfer funds or share passwords.

The Australian Government has also created a useful guide for small businesses wanting to know how they can reduce the threat of a data breach.

If you want to know more about cyber security, contact us today to discuss how your business is prepared.