It is a well-known fact that the financial sector is particularly vulnerable to data breaches. In fact, finance companies are second to healthcare for the highest costs per breach.
Financial organizations are in control of a large number of records containing sensitive information, and they are obligated to maintain the utmost security for this data. This information is of great value to hackers, who try to exploit existing security flaws to get access to customers’ financial records without authorization.
Financial institutions must adopt efficient protective steps to secure confidential information and avoid data breaches, alongside the legal, financial, and reputational detriment that comes with it. Is your finance company able to survive a data breach? Let’s take a look at what steps you can take to ensure your finance business is ready to deal with the consequences of a data breach.
What is a data breach?
When somebody is able to gain unauthorized access to confidential information such as social security numbers or bank account numbers, it is regarded as a data breach. These data breaches are utilized by hackers for unscrupulous activities, for instance, stealing identities and insurance scams.
Data breaches can be costly to businesses in terms of reputational damage, regulatory fines and litigation costs. They also have significant consequences for individuals whose information is compromised, including potential identity theft and fraud, and other negative consequences associated with having one’s information stolen.
Challenges for the finance industry
The monetary losses of data breaches are only one issue to consider. The industry must remain up to date with the progress of digital modernization and technological advances. Digital services, cloud computing and AI are integral components. To cater to client expectations, financial organizations must take advantage of new programs, gadgets, and technology components. Unfortunately, this just broadens their vulnerability to attacks.
In addition, banking and finance are subject to an ever-increasing number of regulations. Keeping up with data privacy and security guidelines is a challenge, and the penalties for not following the rules are becoming more severe.
It is essential for any sector to exercise caution when it comes to third-party risk management. Financial institutions, in particular, need to be especially careful when it comes to confirming the safety of vendors and external suppliers. Infringements by external parties demonstrate the likelihood of cyber-attacks that the financial sector is exposed to. This is due to the fact that it is becoming more and more dependent on vendors who are not able to promise cybersecurity.
How can finance companies survive a data breach?
With the number of data breaches on the rise, it is more important than ever for finance companies to be prepared for a data breach. There are several steps you can take to ensure you are prepared for a data breach:
Conducting cybersecurity assessments: Fundamentally, any risk assessment must start with a thorough review of your company’s information systems. In this context, you must determine the level of cybersecurity that exists within your business. This requires you to perform a cybersecurity assessment and identify any gaps or areas of weakness. The goal is to identify potential cyber threats, determine the likelihood that they will occur, and take any necessary steps to reduce the risk of an attack or data breach.
Strengthen cybersecurity measures: One of the most vital steps to prepare for a data breach is to ensure your business is well protected in the first place. A multi-layered security approach involves deploying a number of measures, such as security software, network monitoring, threat detection, and so on, to ensure that your security teams know about a potential threat before it happens.
Educate your team – In many cases, data breaches occur as a result of human error or negligence. By educating your team on cybersecurity best practices, you can help reduce the risk of a data breach. This includes password management, access policies, safe internet use and email security.
Develop a response plan: Part of being prepared for a data breach is ensuring you are ready to respond as quickly as possible. A response plan should outline specific steps you will take if there is a data breach, including who will be responsible for what and at what point you will communicate with your clients.
Develop a strong security posture for your finance company
The security of your fiance company is non-negotiable in today’s threat landscape and that requires the most up to date security solutions available. The cybersecurity consultants at Aquarius IQ can help you to understand the specific challenges of the finance industry relating to cybersecurity and ensure your business and customers are protected.