Cybersecurity for financial data: Protecting your business in the digital age

Why cybersecurity matters for financial data

In today’s fast-paced digital world, businesses of all sizes rely on online banking, Customer Relationship Management (CRM) platforms, cloud accounting and digital transactions. While these technologies enhance efficiency and convenience, they also expose businesses to cybersecurity risks such as data breaches, fraud and financial theft.

For all businesses, safeguarding sensitive financial data is paramount. A single security breach can result in severe financial losses, reputational damage and legal consequences. For many services businesses handling client data, and client customer data, the impacts can spread well beyond your own business, creating a perfect storm and at worst even an existential threat to your business.

Worried? You should be. According to recent reports, cybercrime is on the rise, with small and medium-sized businesses (SMEs) being prime targets due to often inadequate security measures.

Help is at hand though. At Westcotts, we understand the importance of financial data security and are here to support clients to put in place robust processes and security measures.

Best practices for safeguarding financial information

With cyber threats evolving constantly, businesses must take proactive steps to protect their financial records, transactions and sensitive client information. Below, we outline essential cybersecurity best practices to help safeguard your business.

1. Implement Two-Factor Authentication (2FA)

Passwords alone are no longer enough to protect financial accounts. Two-Factor Authentication (2FA) adds an extra layer of security by requiring a second form of verification, such as authentication software, a code sent to a mobile device or biometric authentication.

• Enable 2FA on all banking, accounting and payroll software.
• Encourage employees and finance teams to use unique, complex passwords.
• Regularly review and update security settings to keep accounts secure.

2. Secure cloud storage and accounting systems

Cloud-based accounting and financial software such as Xero, QuickBooks and Sage provide convenience and real-time data access, but they must be configured securely.

• Choose platforms that offer encryption, regular backups and compliance with data protection regulations (such as GDPR).
• Restrict user access to company and customer data and financial records, ensuring only authorised personnel can view, edit or download sensitive data. More on this below.
• Implement multi-factor authentication to monitor and control who accesses financial systems.

3. Train employees on cybersecurity awareness

Human error is one of the biggest vulnerabilities in cybersecurity. Regular staff training can raise awareness and help prevent phishing attacks, malware infections and unauthorised access.

• Conduct regular cybersecurity workshops for employees handling customer and financial data.
• Educate staff on recognising phishing emails and avoiding suspicious links, attachments or calls.
• Establish clear protocols for reporting suspected cyber threats.

4. Use fraud detection and monitoring tools

Financial fraud can occur when hackers gain access to accounts or manipulate transactions. Businesses should use fraud detection software and real-time monitoring tools to stay ahead of cybercriminals.

• Set up automated alerts for unusual banking or financial activity.
• Regularly review bank statements, credit card transactions and accounting records for discrepancies.
• Implement AI-driven fraud detection tools to identify suspicious behaviour in financial transactions.

5. Keep software and systems up to date

Outdated software can create security vulnerabilities that hackers exploit. Keeping all financial systems updated is essential to protecting against cyber threats.

• Regularly update accounting software, operating systems and cybersecurity tools.
• Use reputable antivirus and anti-malware software to detect and prevent threats.
• Work with IT specialists to conduct periodic security audits and penetration testing.

6. Backup financial data securely

In case of cyberattacks, hardware failures or accidental data loss, secure backups can help businesses recover quickly.

• Schedule automated daily backups of financial data.
• Store backups in a secure cloud location and a separate offline storage system.
• Encrypt backups to prevent unauthorised access.

7. Limit access to financial information

Not everyone in your business needs access to financial records. Restricting access minimises the risk of internal data breaches.

• Use role-based access controls (RBAC) to limit access to financial data based on job roles.
• Regularly audit who has access to sensitive financial information.
• Remove access immediately for employees who leave the company or change roles.

8. Secure business email systems

Email fraud is one of the most common ways cybercriminals target businesses. Implementing secure email practices can prevent financial scams.

• Use email encryption for sensitive financial communications.
• Train employees to recognise business email compromise (BEC) scams, such as fake invoices or fraudulent payment requests.
• Verify payment requests with a phone call before transferring funds.

The consequences of poor cybersecurity

Failing to implement strong cybersecurity measures can lead to:

• Financial loss – Cyberattacks can result in direct financial theft or costly fraud.
• Regulatory penalties – Businesses that fail to protect financial data may face fines for non-compliance with GDPR, FCA or HMRC regulations.
• Reputational damage – A data breach can severely damage a business’s reputation and customer trust.
• Operational Disruption – Cyberattacks can shut down business operations, leading to downtime and lost revenue.

Stay proactive: Protect your business today

Cybersecurity is not just an IT concern – it is an operational and financial priority.

At Westcotts, we advise businesses on financial security, risk management and compliance. If you need guidance on safeguarding your financial systems or implementing cybersecurity best practices, our team is here to help.