Just as you probably wouldn’t leave the door wide open and unlocked to your home.

Or leave young children to play unattended.

You also wouldn’t leave your business finances easily accessible and exposed.

Whether it’s payroll data, supplier invoices, customer payment details, or internal reports, financial information is some of the most sensitive data a business holds.

And yet, many small and medium-sized businesses treat data security as an afterthought.

A “nice to have.”

Something to worry about… later.

Unfortunately, “later” often becomes “too late.” You don’t want to find yourself spending excess time and resources firefighting after the fact, when most of the risk has materialised, and the blaze is in full swing!

Oftentimes, as with fire, once it has set light and in motion, there is actually much less you can do in the present to reverse or delay that fact.

In this article, we’ll explore:

• Why data security is business-critical in finance (especially for SMEs)
• The top risks and real-world consequences of poor financial data protection
• Practical steps to improve your data security position even without a huge budget
• How good financial security builds trust, resilience, and long-term value

By the end, you’ll have a clearer understanding of what’s at stake and how you can improve the security of your financial information.

What Does “Data Security in Finance” Really Mean?

Put simply:

Data security in finance is the practice of protecting your financial information and that of your customers, suppliers, and employees from unauthorised access, theft, loss, or misuse.

It includes:

• Protecting software systems like accounting tools and payroll platforms
• Securing personal and financial data stored in spreadsheets, PDFs, and internal reports
• Safeguarding passwords, access levels, and who can do what
• Making sure sensitive data is backed up, recoverable, and handled in line with UK regulations (like GDPR)

It’s not just about the stereotypical image of cybercriminals in hoodies operating from basements! Or organised decentralised collectives of hacktivists like Anonymous.

A surprising number of data breaches happen because of simple, preventable mistakes like lost laptops, poorly trained staff, or old-fashioned human error.

In short: if you hold or handle financial data (which you do), you need to secure it properly.

Why Should SMEs Care About Data Security?

There’s a common misconception that only big companies are targeted.

“We’re too small to be interesting,” some business owners think.

But here’s the reality:

• 43% of cyberattacks target small businesses (source: Hiscox Cyber Readiness Report)
• 60% of small businesses shut down within six months of a major data breach (source: National Cyber Security Alliance)
• Data protection fines for SMEs are increasing and ignorance isn’t a defence
• Cyber security insurance premiums are rising reflecting the increased risk and number of cyber attacks

In today’s digital-first world, data is a form of currency. It literally has the power to affect how you trade and exchange with others. If that currency is compromised in any way, the impact can be brutal.

Real-world consequences include:

• Loss of customer trust and reputation
• Financial penalties from regulators
• Legal action from affected clients or staff
• Business downtime and lost revenue
• Stress, sleepless nights, and wasted hours trying to clean up the mess

As you can see, these represent large and material impacts for you and your business.

This is why data security is not something that can or should be “put off until later”.

The Hidden Risk: Your Finance Function

Financial data sits at the core of your business. That makes your accounting systems one of the most attractive targets for attackers and one of the most common weak spots.

A successful attack can bring down everything you’ve built in one go.

Some common vulnerabilities include:

• Outdated accounting software with unpatched security holes
• Sharing passwords across multiple users or platforms
• Using an unsecured email to send payroll or tax files
• Lack of two-factor authentication (2FA) for finance systems
• Staff with inappropriate access to sensitive information
• DIY spreadsheets with zero access control or version tracking

It’s also not always the tech that’s the issue.

Sometimes a well-meaning but overwhelmed internal team using poor tools or taking shortcuts to “get things done” can be the issue.

That’s where professional, outsourced finance functions can help.

How We Approach Financial Data Security at RedBrick

At RedBrick, we treat your financial data like the front door key to your home: it’s not just about access, it’s about trust, responsibility, and safety. You are placing trust in us, when you give us access to your data.

As ICAEW Chartered Accountants, we operate under strict professional codes and regulatory frameworks. But beyond this, it’s about our values: accuracy, reliability, and integrity.

We don’t just “keep your data safe”, we make security part of how we work with you. Whilst also balancing principle with pragmatism.

How do we do it?:

• Cloud-based, secure systems with bank-grade encryption (e.g. Xero, Dext, BrightPay)
• Controlled access levels you decide who sees what
• Data backups and version history so nothing gets lost or overwritten
• Two-factor authentication (2FA) is the standard for all team logins
• Ongoing staff training on phishing, fraud risks, and cyber hygiene
• Compliance-considerate culture backed by regular audits from ICAEW and quality control

We believe this is not just good practice, but also makes for good business and better results.

How to Improve Your Data Security Without Breaking the Bank

We get it. Time is limited, you’re on a budget, and you haven’t got space or capacity.

However you don’t need enterprise-level infrastructure to dramatically improve your financial data security.

Here are five practical and affordable steps you can take today:

1. Upgrade to cloud-based accounting

Still using desktop software or spreadsheets? Cloud platforms like Xero offer better encryption, access control, and disaster recovery options, with automatic updates and backups.

2. Use strong, unique passwords

Standard usernames like “admin” or passwords like “12345678” or the name of your immediately family are no longer acceptable. Use a password manager (like 1Password or Bitwarden) to store secure, unique credentials for each system. And yes, we know it can be annoying, but turn on 2FA!

3. Restrict access by role

Not everyone in your business needs access to payroll, bank feeds, or supplier payments. Set user roles and permissions based on job function.

4. Train your team

Human error is still the biggest cause of data breaches. Run regular training sessions on how to spot phishing emails, fake invoices, and unusual login activity.

5. Backup your data

Make sure your financial data is automatically backed up and that you can recover it quickly if something goes wrong. Many cloud tools already include this, but check what’s included (and test it).

Bonus tip: work with a professional accountant who already has security baked into their systems, not one who uses Gmail and sends you your VAT returns in Excel.

The Link Between Trust, Finance, and Data Security

Data security is not just a technical problem. It’s also a people problem. A trust problem.

When clients, employees, and partners share financial data with your business, they’re extending trust. That trust is easily broken and it’s very hard to rebuild once that happens.

Insecure systems don’t just risk fines or hacks. They signal to others that you’re not taking things seriously, or you’ll “drop the ball” in the future. It’s a sign you’re cutting corners or not preparing properly. That you might not be the safest pair of hands.

On the flip side, good data security:

• Builds trust and credibility
• Shows professionalism and maturity
• Strengthens supplier and client relationships
• Makes audits, funding applications, and tax investigations less painful
• Future-proofs your business as it grows

Security is invisible when it’s working, but painfully visible when it’s not.

This Isn’t a “One and Done”

Improving financial data security isn’t about installing some antivirus software and ticking a box. It’s an ongoing process that requires work.

The threats change. Regulations change. Your business changes. The environment and culture changes.

That’s why it helps to have a partner who lives and breathes finance and accounting, someone who sees the full picture, from systems to strategy.

We’re not just accountants. We work as an extension of your finance team. We’re your internal audit buddy. Your tech translator. Your early-warning system. Your sounding board and sense check.

We make sure your financial data is safe, secure, and compliant. On top of helping you  feel at home with your numbers.

Security Is Part of Good Business

If you’ve made it this far, here’s the key takeaway:

Financial data security isn’t just about protecting yourself from worst-case scenarios. It’s about building a better, stronger business. One that’s trusted, respected, and built to last.

So whether you’re a startup still running things from your garage office, or a growing SME juggling multiple systems and staff, it’s time to treat data security as essential, not optional.

Start small. Start today.

And if you want a partner who’ll treat your finances like their own with care, professionalism, and transparency?

If you want a better home for your business finances, email: hello@redbrickaccounting.com