The vast amounts of valuable information most financial services companies control make them an optimal target for cyberattacks. From login credentials to customer financial data, these firms have everything criminals need to steal assets and cause disruption.
The complex supply chain ecosystem also makes FIs vulnerable to attacks compromising software distribution systems and enabling threat actors to access internal networks. Here’s why cybersecurity must be a priority for every team within a finance organization.
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It’s a Competitive Differential
Financial services companies must invest in cybersecurity to maintain the trust of their customers, protect their reputations, and safeguard their assets. Moreover, cybersecurity is essential for preventing financial fraud, ensuring regulatory compliance, and protecting intellectual property. Unfortunately, cyberattacks are on the rise and can devastate the bottom line.
A single cyberattack can lead to losing millions of dollars and exposing customer data. In addition, it can affect a company’s reputation and even threaten its survival. The damage can be significant, especially for banks. In fact, according to an Allianz report, the risk of cyber incidents for financial firms outpaces those from COVID-19, business interruptions, regulatory changes, and global macroeconomic shifts.
Fortunately, many of the most common cyberattacks are preventable with solid cybersecurity practices. These include cyber “hygiene,” secure-by-design systems, and robust incident response and recovery capabilities. Additionally, educating employees and establishing internal controls is essential.
It’s no secret that threat actors target financial services companies because they have what they want — data and money. Once stolen, that information can be used to open new accounts, purchase, and commit other crimes. Additionally, the financial industry has strict regulations and a wide range of potential liabilities that must be managed, including fines, investigations, and legal costs.
It’s a Regulatory Requirement
The finance industry is a prime target for cybercriminals because it handles sensitive customer data and financial transactions. Cyber security in financial services is essential to prevent financial fraud, ensure regulatory compliance and safeguard intellectual property—the average financial firm experiences over 125 cyberattacks each year, costing the industry millions of dollars. Financial services companies must prioritize cybersecurity, boosting cyber “hygiene,” implementing secure-by-design systems, and investing in security testing and training to avoid these damaging attacks. Moreover, they must ensure that all third parties are vetted and have adequate security controls. Increasingly, financial services companies rely on technology service providers and supply chain partners to meet customer demands for faster digital services. This increases the attack surface and introduces new vulnerabilities that must be managed.
Internal threats also pose significant risks for the finance industry, from employees accidentally clicking on phishing links and downloading malware to losing laptops or USB drives containing confidential information. Financial services companies must continually reskill their existing workforce to meet evolving security requirements.
The government is keen on regulating how businesses protect their data and assets as cyberattacks increase. This is why focusing on security priorities is more important than ever. It’s a Human Resource Issue
As financial institutions become more data-driven, their employees can be at risk of cyberattacks. This is due to the sheer volume of sensitive files that employees can access, including PII, credit card data, and credentials. Additionally, employees who aren’t adequately trained can be left vulnerable to attack and make mistakes that expose the company to threats.
To protect their employees, the HR department must prioritize cybersecurity training. This should include educating employees on the daily risks and what to do if they suspect an attack. These programs should be continually refreshed to ensure that employees’ knowledge is current.
Additionally, financial services companies can help employees develop cybersecurity skills by upskilling or reskilling them. This can be as simple as sending employees to an online course or providing mentorship from an internal expert. For those in high-performing roles, offering the opportunity to pursue a career in cybersecurity can be a powerful incentive for them and a way to grow their careers within the company.
For financial services organizations, cybersecurity must be an absolute priority — not only because of the risks and regulatory requirements but because it’s a business issue that needs to be addressed at all levels of the organization.
It’s a Financial Issue
As the financial industry faces rapid digital transformation to keep pace with customer demand for a seamless digital experience, it must also ensure cybersecurity measures are in place. This includes implementing cyber hygiene, security by design, and establishing an effective incident response plan. The financial services industry must prioritize cybersecurity to maintain customers’ trust, prevent financial fraud, ensure regulatory compliance, and safeguard intellectual property.
The plethora of money and data that financial institutions control makes them a prime target for bad actors. This makes them need to prioritize cybersecurity and implement best practices.
Additionally, a financial firm’s employees are often the weakest link in their cybersecurity defenses. This is because employees can click on phishing emails, download malware or lose laptops and USBs that contain sensitive information. Therefore, financial firms must educate employees about cybersecurity and provide security awareness training.
Finally, the complex supply chain ecosystem that most financial firms rely on can introduce new vulnerabilities to their systems. Many FIs have little control over third-party service providers and suppliers, who can infect a company’s network with malicious code through product downloads or software updates. This can allow threat actors to access critical FI systems and steal data.
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