The Importance of Cybersecurity for Financial Services Businesses

In the financial industry, cybersecurity is critical to protect against cyber threats that can result in significant financial losses, reputational damage, and legal and regulatory sanctions. Therefore, financial services businesses must prioritise cybersecurity to ensure that their systems, networks, and data are secure.

Conduct Regular Risk Assessments

Financial services businesses should conduct regular risk assessments to identify vulnerabilities in their systems and networks. These assessments can help businesses prioritise cybersecurity investments and focus on the most significant risks.

For example, in 2017, Equifax suffered a massive data breach that exposed the personal information of over 147 million people. The breach was caused by a vulnerability in Equifax’s web application software that had not been patched. An investigation revealed that Equifax failed to conduct regular risk assessments, which contributed to the breach.

Implement Strong Password Policies

Strong password policies can help prevent cyberattacks by making it more challenging for hackers to gain unauthorised access to systems and data. Financial services businesses should require employees and customers to create complex passwords and change them regularly.

For instance, in 2014, JPMorgan Chase suffered a data breach that exposed the personal information of over 76 million households and 7 million small businesses. The breach was caused by weak passwords that hackers were able to crack easily.

Regularly Update Software and Systems

Financial services businesses should regularly update their software and systems to ensure that they have the latest security patches and features. Updates can help protect against known vulnerabilities and reduce the risk of cyberattacks.

In 2016, the Central Bank of Bangladesh suffered a cyberattack that resulted in the theft of $81 million from its account at the Federal Reserve Bank of New York. The attack was caused by a vulnerability in the bank’s SWIFT system, which had not been updated with the latest security patches.

Train Employees on Cybersecurity

Employees are often the weakest link in a company’s cybersecurity defences. Therefore, financial services businesses should provide regular training to employees on cybersecurity best practices and educate them about the risks of cyberattacks.

For example, in 2019, ZOLL Medical Corporation suffered a data breach that exposed the personal information of over 277,000 people. The breach was caused by an employee who fell victim to a phishing email that contained malware. After the breach, the company implemented a comprehensive cybersecurity training program to educate employees on how to identify and avoid phishing emails.

Have an Incident Response Plan

Despite a company’s best efforts to prevent cyberattacks, they may still occur. Therefore, financial services businesses should have an incident response plan in place that outlines the steps to take in the event of a cyberattack. The plan should include procedures for notifying relevant stakeholders, containing the breach, and restoring systems and data.

For instance, in 2016, Bangladesh Bank faced criticism for its slow response after suffering a cyberattack that resulted in the theft of $81 million from its account at the Federal Reserve Bank of New York. The bank lacked an incident response plan, which allowed the hackers to transfer the stolen funds to accounts in the Philippines.

Conclusion

In conclusion, cybersecurity is critical for financial services businesses. A data breach can have severe consequences, including financial losses, reputational damage, and legal and regulatory sanctions. Therefore, financial services businesses should prioritise cybersecurity by implementing a comprehensive cybersecurity program that includes regular risk assessments, strong password policies, regular software and system updates, employee training, and an incident response plan. By taking these steps, financial services businesses can mitigate the risks of cyberattacks and protect their systems, networks, and data from cyber threats.