Data Breach Response Techniques Presented at February Dinner Meeting
Branch and Deposit Profitability Strategies Featured at Mini-Session

Maintaining adequate cyber security to protect an institution’s financial data is now a significant priority on the minds of financial managers. The Chapter’s February Dinner Meeting featured a very informative and contemporary dinner program entitled Cyber Liability Insurance and How to Respond to a Breach. The program was presented by John Lawrence, Director Financial Institution Services at M&T Insurance Agency, a division of M&T Bank. The event was held at the Stony Hill Inn in Hackensack, N.J. on February 17, 2016.

Featured dinner speaker John Lawrence, M&T Insurance Agency, presents Cyber Liability Insurance and How to Respond to a Breach.
Chapter President Brian McCourt welcomes the Membership to the Febuary Dinner Meeting.
John Lawrence outlines the components of the typical data breach cycle followed by recommended procedures to avoid a data breach.
John described the coverages provided by cyber insurance and compared the coverage to the more typical general liability, property and auto insurance policies. He explained how cyber insurance is composed of first party and third party liability insuring agreements designed to protect an institution’s network and information, communications and media as well as provide reimbursement for crisis management expenses and security breach and remediation costs. He noted that the average costs of a typical data breach exceed $1.6 million consisting of crisis management, legal defense and final settlement. John also noted that human error or a negligent employee are the cause of more than 75% of data breaches.

John outlined the components of the typical data breach cycle. He emphasized that “stopping the intrusion” is the primary response followed by initializing a legal review, conducting forensic analysis, managing public relations, informing the customers and monitoring fraud activity. John recommended a series of procedures that institutions should implement to protect against a cyber data breach. He concluded by answering a number of insightful questions from the membership.

Branch and Deposit Profitability: 2006 vs. Today was the topic of the afternoon mini-session presented by Gregg Wagner, Managing Director and Jeff Marsico, Executive Vice President of the Kafafian Group. Each of the speakers has more than 20 years of experience providing key management solutions to the community banking industry. The speakers described today’s “sorry state of branch profitability” which has declined significantly over the past ten years. They noted a 63% decline in direct branch profits and a 6.3% decline in the number of nationwide branches compared to 2006. Historically low interest rates, smaller asset-liability spreads and dramatically smaller fee income were described as the “culprits” of the decline.

Jeff and Gregg clearly showed how the current branch unit profitability has declined vs. 2006. The average deposits in each branch has increased due to a smaller number of branches. The dramatically smaller spread from low interest rates combined with lower fee income has reduced net pre-tax income from a significant profit in 2006 to an average net loss in 2015. The speakers concluded by providing key takeaways to improve branch profitability.

Topics and Speakers

Cyber Liability Insurance and How to Respond to a Breach

Thomas Kozlik photo
John Lawrence
Director, Financial Institution Services
M&T Insurance Agency

Slide Presentation

Branch and Deposit Profitability: 2006 vs. Today

Sara Higgins Photo
Gregg Wagner
Managing Director
The Kafafian Group
973-299-0300 x114

Slide Presentation

Sara Higgins Photo
Jeff Marsico
Executive Vice President
The Kafafian Group
973-299-0300 x120

Chapter Secretary, Sal Zerilli (2nd l.) smiles with Chapter Members during the cocktail hour.
Branch and Deposit Profitability was presented by Jeff Marsico (pictured) and Gregg Wagner of the Kafafian Group, at the mini-session.
Members earn valuable CPE credits while attending the free mini-session.