The second-ranking Treasury Department official encouraged banks to get cyber risk insurance during an industry conference on Wednesday.
“I have been asking our insurance and cyber experts at Treasury to think about how to encourage an environment where market forces create insurance products that enhance cybersecurity for businesses,” said Sarah Bloom Raskin, deputy secretary at the Treasury, during a Texas Banker’s Association conference.
{mosads}“Ideally, we can imagine the growth of the cyber insurance market as a mechanism that bolsters cyber hygiene for banks across the board,” she added.
Treasury is one of the agencies lawmakers have been pressing for more information on how they are working with banks to reduce the proliferation of cyberattacks. The Senate Banking Committee will hold a hearing next Wednesday to discuss this relationship.
“Bankers rarely used to talk to me much about cybersecurity,” Raskin said. “Now, this is one topic that comes up every day.”
A recent breach at JPMorgan exposed the names, addresses, emails and phone numbers of 76 million households, drawing attention to the banking sector’s cyber defenses.
Cyber risk insurance can’t eliminate such data breaches, but it can provide a modicum of financial relief, Raskin said.
“And, significantly, cyber risk insurance and the associated underwriting processes can also help bolster your other cybersecurity controls,” she said.
Insurance brokerage firm Marsh & McLennan estimates the U.S. cyber risk insurance market could double to $2 billion in 2014.
“Qualifying for cyber risk insurance can provide useful information for assessing your bank’s risk level and identifying cybersecurity tools and best practices that you may be lacking,” Raskin said.