Lessons from the CrowdStrike Outage

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Hi everyone,

Last Friday, when CrowdStrike faced its recent outage, it sent ripples across industries. For us as accountants who juggle some seriously sensitive data, a security lapse can be catastrophic.

But there’s more to this incident than just cybersecurity, there’s something that forces us to rethink all about preparedness, resilience, and trust.

Before we get into what happened, here’s a Gartner stat to put things in perspective: The average cost of IT downtime is $5,600 per minute – that’s over $300,000 per hour we are talking about!!

How about we start off talking about being prepared? The CrowdStrike outage was unexpected. Many businesses scrambled to keep things running. How ready are we for something like this?

Only 32% of businesses currently have a cyber insurance policy in place, despite the increasing frequency of cyber-attacks.

For accountancy firms, having a solid business continuity plan (BCP) is a must. And oh, don't look at BCP as simply having data backups, it’s about having alternative procedures in place for every critical function. From client communication to financial reporting, every aspect of your operations should be covered.

Next, let’s discuss resilience. Did you know that 60% of small businesses close within six months of a major cyber-attack? We don’t want to be part of that statistic.

This outage showed us how important it is to have strong IT systems. Do we have good backups? Are our systems ready for surprises? Investing in resilient IT infrastructure might seem costly, but it’s worth it.

Client data is the lifeblood of our business. Encryption, access controls, and regular security audits are fundamental. But it goes beyond technology.

95% of cybersecurity breaches are due to human error. Employee training on data handling practices and security awareness is equally important. Remember, a strong security culture starts from within.

Then, there’s trust – that’s built slowly but lost quickly.

Our clients trust us with their sensitive data. How do we keep that trust? By being transparent. When things go south, clear and timely communication with clients is crucial. Keeping them informed minimizes disruption and builds trust.

A well-crafted communication plan can mitigate panic and preserve your firm's reputation. Practice crisis communication scenarios to ensure a coordinated and effective response.

Crisis communication coupled with regular cyber security audits are the key to safeguarding your firm’s data and business. In fact, the Ponemon Institute reports, that companies that perform regular cybersecurity audits reduce their risk of cyber-attacks by 50%.

All in all, the CrowdStrike outage reminded us again that no one is safe from cyber threats.

For us as accounting leaders, the imperative is to not look at it like a threat, but view it as an opportunity to elevate the accounting industry's cybersecurity standards.

Learn more about the key takeaways from the global tech disruption in our blog here

Stay secure, stay prepared.

Until next time,

Arun

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