Hidden Risks of Cybersecurity Failures for Financial Services
Cybersecurity in any financial services is highly important, as they’re one of the most targeted industries for cybercrime.
This is largely due to the potential outcome of the hackers. Financial services usually have financial information, which, of course, holds a lot of value.
However, this isn’t the only risk. There are many “Hidden” risks of poor cybersecurity in the financial industry.
The Growing Cyberattack Threat in the Financial Industry
At the moment, financial firms are 300 times more likely to be targeted by cyberattacks than other industries.
Federal Reserve Chairman Jerome Powell even said, “The thing that we worry about a lot is cyberattacks”. He then went on to mention that all agencies (US agencies) are working tightly together to prevent cyberattacks on the financial industry.
And it’s understandable. In a paper by the New York FED, they suggested that an impairment of any of the top 5 US banks could affect 38% of the country’s network.
If a cyberattack like this were to happen, it wouldn’t just cripple the banks. It’ll cripple millions of people and businesses.
3 Hidden Risks Poor Cybersecurity Has for Financial Services
1. Financial Losses
One of the most significant losses is the financial losses that come with poor cybersecurity for financial services.
Though there aren’t specific figures for the financial industry, IBM reports this to be around $4,88 million (around £3.7 million).
2. Indirect Costs
You also have lots of indirect costs. Reputational damage and cost of security upgrades, for example.
Reputational damage can be irreversible. The cost of security upgrades can go into the hundreds of thousands and maybe even millions.
For example, though not a financial company, the Gloucester City Council’s data breach cost just over £300,000 on upgrades and repairs. This doesn’t account for the extra £728,000 spent on recovery support and consultants.
3. Operational Disruption
Cybersecurity failures in the financial industry can also cause operational disruption.
Take the cyberattack on the Central Bank of Lesotho, for example. It halted and disrupted national payment systems, probably costing millions.
Emerging Tech, New Cyber Risks
Recently, financial services have been adopting new technologies—for example, cloud computing, AI, and so forth.
However, new technology brings new exposure to threat actors and data breaches.
In a recent poll by McKinsey & Company, 57% of surveyed applicants suggested that they’re concerned about keeping up with the pace of technology regarding cybersecurity.
And this will only become progressively worse. More tech will bring more cyber challenges, and it’s your job to stay above them to above crippling business.
Get Cybersecurity for the Financial Industry
Cybersecurity in financial services shouldn’t be an afterthought. It should be a proactive measure to ensure you, your company, and your clients remain safe.
To ensure you stay safe with the ever-evolving merging tech, contact XLCyber. We’re your trusted partners who’ll make your workplace safe and secure so you can focus on what you do best.