The Risks Are Great. The Consequences Are Dire. You Need Expert Help From a Quality Partner.
Maintaining a focus on cybersecurity is crucial for all organizations, but it’s particularly vital for financial institutions due to the dynamic nature of cyber threats. In today’s digital age, where accessing the financial sector is as easy as a few taps on a mobile device, the risk posed by cybercriminals continues to evolve, emphasizing the need for robust protection measures.
The objective? To keep sensitive data from the wrong hands. This is becoming more difficult by the day. PwC’s latest Global Economic Crime and Fraud Survey names cybercrime the most disruptive and widespread economic crime experienced globally. Attack types vary, from ransomware attacks to phishing attempts to social engineering assaults.
But how do financial institutions stay one step ahead of bad actors? The answer: They perform a thorough assessment of their cybersecurity environment and processes and then take action to remedy any issues or weak spots. This may sound simple, but conducting a cybersecurity assessment is a complicated task and not one that every in-house IT team is prepared for.
In this article, we’ll explore the risks of sub-optimal cybersecurity and address the urgent need for partnerships with cybersecurity professionals who can assess current threats, proactively monitor emerging and evolving threats, and keep your institution’s data safe.
The Business Risks of Suboptimal Cybersecurity
A lack of robust cybersecurity poses significant business risks for financial institutions. It is crucial to address these risks proactively to protect sensitive financial information, maintain customer trust, and ensure the overall stability of the institution. Here are some key risks to consider:
- Data breaches. Unauthorized access to confidential information is harmful in several ways. Inadequate cybersecurity measures increase the likelihood of data breaches compromising sensitive financial data, including customer account information, credit card details, and transaction records. This leads to economic losses, regulatory penalties, reputational damage, and potential lawsuits.
- Fraud and identity theft. Weak cybersecurity defenses make financial institutions susceptible to phishing attacks, malware, and social engineering schemes. The result? Fraudulent activities, unauthorized access to customer accounts, and identity theft. These incidents can lead to financial losses (and often do) for both the customers and the institution and damage your institution’s reputation.
- Regulatory non-compliance. Financial institutions are subject to many regulations and compliance requirements from government authorities and industry bodies. Suboptimal cybersecurity practices can lead to non-compliance, resulting in regulatory fines, legal ramifications, and potential loss of operating licenses.
- Operational disruption. Cyberattacks, such as distributed denial-of-service attacks or ransomware attacks, disrupt financial institutions’ normal operations. These disruptions impact customer service, transactions, and overall business continuity. Downtime can lead to financial losses, customer dissatisfaction, and reputational damage.
- Loss of trust and customer loyalty. If a financial institution experiences a significant cybersecurity incident, it can erode customer trust and confidence. Customers may fear further breaches, leading to a loss of business for the institution. Rebuilding trust is a time-consuming and costly process.
You might remember the Equifax data breach of 2017 that affected 143 million consumers. While not strictly a financial institution, they have much of the same information. It cost them $425 million, and the reputational crisis still lingers.
Financial institutions should prioritize cybersecurity measures, including regular risk assessments, to address these risks and take decisive action.
Common Risks Found During Cybersecurity Risk Assessments
The first step toward a resilient, enduring cybersecurity plan is a risk assessment. This evaluates the threats to your technology stack and data and your ability to safeguard those assets. Because financial institutions have a lot of sensitive data to protect, they are often a prime target for bad actors. A 2023 International Money Fund report highlights the urgent need for better cybersecurity safeguards. The report points out that the financial sector is complicatedly interconnected, and a breach in one place can lead to breaches in others.
Additionally, the proliferation of artificial intelligence (AI) poses a specific risk that the financial sector isn’t prepared for, according to the U.S. Department of the Treasury. Beyond data theft, cybercriminals pose a threat to machine learning models themselves. By stealing these models, they can exploit them for malicious ends. Furthermore, these malicious actors can tamper with input and training data, leading to unintended behaviors or inaccurate outcomes from the machine learning algorithms. Some of the most common issues found during assessments include:
- A lack of multilevel security measures
- A lack of monitoring and assessment
- Not updating and patching software and systems when needed
- A lack of encryption
- No employee training programs
- No backup and recovery process
Then, there’s the cloud. As financial institutions increasingly embrace the cloud, vulnerabilities come in the form of cloud misconfigurations, lack of access controls, and no visibility into cloud infrastructure. Insider threats pose another risk – they increased 44% between 2020 and 2022. This shows the importance of employee awareness training, strict access controls, and technology in the form of data loss prevention tools and activity monitors.
Spend Your Time Serving Clients, Not Fighting Hackers
Since the pandemic, cybercrime has increased by 600%. Since 2015, it has grown from a $3 trillion industry to a $10.5 trillion one, with no end in sight. And don’t forget about long-tail costs such as revenue and reputational losses that can last for years. One more significant stat—it’s predicted that by 2031, a ransomware attack will happen every two seconds.
It’s challenging for an internal team to keep up with the growing number and sophistication of cyberattacks. Sometimes, the very thing you think will protect you (AI) and increase operational efficiency is, in turn, being used to launch strikes.
This is why getting help from experts who can perform a detailed, agnostic assessment of your cybersecurity posture and recommend necessary improvements is critical. Cybersecurity is not a one-and-done proposition. Keeping up with hackers takes constant vigilance and frequent assessments.
Manage Your Cybersecurity Risks With Core BTS
Suboptimal cybersecurity puts a lot at risk. At Core BTS, we perform thorough cybersecurity assessments that lead to superior protection. When you partner with us, we work with your internal team to implement new controls.
We know hackers never rest, and the threat landscape continuously evolves, so after the assessment is done and new controls are in place, we offer ongoing vulnerability management and full security management, with BTS providing comprehensive cybersecurity oversight through our Secure by Design program.
Don’t wait until it’s too late to improve your cybersecurity posture. Contact us, and let’s start your assessment.
