It’s hard to overestimate the importance of strong cybersecurity these days — especially in the financial sector.
In the last decade especially, we’ve seen what a bad breach can do — lost customers, negative brand reputation and huge financial losses. Financial services companies must invest in technology that helps them prevent, detect and stop attacks.
Too often, organizations rely on outdated or only baseline regulations, making a list of what they must do to stay compliant and then focusing only on checking those boxes.
The result is often lackluster security.
The business case for investing in security
Many organizations will cite a lack of budget for their inadequate cybersecurity. In fact, in a July 2020 survey by Deloitte, respondents said that, on average, 10.9% of their company’s IT budget was dedicated to cybersecurity.
It’s understandable. IT is tasked with a lot these days, from procuring hardware and troubleshooting for users, to enabling an entirely remote workforce and driving innovation across the business. Plus, the cost of software, experienced IT security professionals and new company-wide training programs can be pretty sizable.
But so can the benefits.
Here’s what financial services organizations stand to gain when they prioritize IT security.
Avoid costly breaches.
Though the finance sector isn’t the most frequently attacked industry, its businesses do suffer the biggest financial loss per breach.
According to a report by Bitglass, breaches at financial services firms accounted for a small percentage of total breaches in 2019, but they were more than twice as expensive. The average cost per compromised record was $388 in 2019. For comparison, the next most expensive was the technology industry at $183 per record.
In the case of a ransomware attack, some of that money is going directly to the threat actors. But it’s the resulting loss of customers, long-lasting harm to brand reputation and legal issues that push the average cost of a breach so high.
The amount of IT budget needed to build a better security environment is pretty minimal when put against the price of even the smallest breach.
Gain customer confidence.
Your customers trust your company to protect the private information they share with it. When a breach occurs, it shatters that trust and, more often than not, sends customers running to another organization.
This contributes to the astronomical costs of breaches in the financial industry.
When you make IT security a priority, you’re making customers a priority. And they’ll repay you with loyalty and a positive brand reputation — two things that are absolutely invaluable these days.
Stay ahead of regulations.
Government regulations can’t seem to keep up with technological advancement. Legislature is usually years (if not decades) behind the times because companies are adopting FinTech solutions faster than they can regulate them.
But there will be a time when today’s newer technology is the main topic of conversation in the halls of government.
Forward-thinking companies see the benefit of being ready now; mainly, that by investing in security solutions today, they’ll already be on their way to compliance in the future.
Technologies such as artificial intelligence and the Internet of Things (IoT) are taking the financial sector by storm.
All these connected devices, systems and people create incredible opportunities for innovation and better business outcomes. Unfortunately, the increased connectivity also gives cybercriminals more surface area to attack.
As organizations embrace newer FinTech, their cybersecurity has to keep up. Companies that are only concerned with compliance will fall further behind — a gap cybercriminals are only too happy to take advantage of.
Beyond the security checklist
The fact is, it’s not a matter of if your company gets hacked. It’s a matter of when.
The organization that thinks only of compliance is taking a big risk, not to mention missing out on the massive benefits that come with a more robust security environment.
It’s time to move beyond those checkboxes and build security that can prevent, detect and stop cyberattacks before they become a serious liability.