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5 reasons why financial companies should not only fight cybersecurity

Why do so many companies struggle to keep up with the growth of cyber threats and successfully manage their cyber risks?

For a long time, financial services firms have been a favored target for cybercriminals. It is easy to see why, because financial institutions manage a variety of sensitive client data that thieves utilize in various fraud schemes or sell on the dark web markets. According to Verizon’s 2020 Data Breach Investigations report, the banking industry has suffered over 1,500 incidents in the last year alone, with 448 verified data exposures.

In addition to long-term threats, most businesses have recently had to contend with the move to remote labor. The transition occurred in an extraordinarily short period of time, leaving businesses with little time to install proper cybersecurity safeguards or prepare staff for potential cyber dangers. While the pandemic will eventually pass, remote work is likely to persist, adding to the number of issues businesses confront when developing cybersecurity plans and regulations. Companies are already dealing with these difficulties as a result of a variety of circumstances, which we shall discuss below:


Lack of specialized staff

Many businesses are looking for experienced or inexperienced cybersecurity specialists to join their teams and help them establish a robust defense against various threats, but there aren’t enough people to go around. Despite the fact that the cybersecurity job gap has shrunk for the first time in recent years, there is still a global shortage of 3.12 million individuals. To compensate for the global skills shortfall, employment levels in the United States need to rise by 41% and globally by 89%. As a result, in order to recruit the best and brightest minds in this industry, organizations must offer competitive compensation and satisfying career prospects.


Insufficient budgets

Inadequate cybersecurity budgets are a major barrier that inhibits businesses from directly tackling cyber threats. According to a survey conducted by the consulting firm Ernst & Young, 87 percent of the firms polled claimed that they do not have the budget to accomplish the levels of security and cyber resilience that they desire. Due to a lack of resources, firms are unable to hire enough staff in the field of IT security or implement strong enough technical safeguards when various cyber threats develop.



Overestimating the degree of cyber security

Companies frequently overestimate the effectiveness of their cyber security measures. Organizations may believe they have complete control, yet they may not have the greatest vulnerability patch management strategies. The BlueKeep vulnerability in Windows is an excellent-but unsatisfactory-example. The patch was released in May 2019, with Microsoft advising everyone to apply it quickly. A month later, despite the National Security Agency’s own warning, there were still more than 805,000 cars vulnerable to this security flaw in July. It all came to a head in November with the first BlueKeep attacks. It goes without saying that patching such a critical vulnerability should never be put off for six months.


Lack of training on the threat awareness side

Another prevalent occurrence that weakens a company’s cyber security is when employees do not obtain adequate cyber security training. The transition created by COVID-19 to a remote working mode has most likely increased the possibility of employees being fooled into downloading malware or surrendering company credentials. According to a Ponemon Institute survey, while companies reported a spike in cyber threats (including phishing attempts and social engineering) during the pandemic, 24 percent of respondents believed that their employers did not give adequate training on the risks connected with remote work. Worryingly, the study discovered that more than half of the organizations did not have any security procedures in place to accommodate the needs of remote workers.


Underestimating the value of cyber security

Some businesses underestimate the importance of cybersecurity for their operations and instead choose to spend money on areas that they believe will be more beneficial, such as finance extensions or the development of new goods. They may claim that the advantages do not outweigh the expenses, and that the cost of preventive security measures may outweigh the potential damage caused by a data breach. However, while fines and possible losses may be less in the short term, reputational damage could lead to a greater decrease, including a loss of client confidence, affecting income streams. Alternatively, if successful, thieves might get access to the company’s intellectual property, which they could then sell on the dark web alongside consumer data. As a result, cyber security should always be a top concern, as it protects both the organization and its customers.


Conclusion

When confronted with a cyber attack, any of the aforementioned elements could pose issues for most firms. On the plus side, financial services firms have begun to take cybersecurity seriously at the highest levels. McKinsey & Company discovered that 95 percent of board committees surveyed examine cyber and technology issues at least four times each year. It is worth mentioning, however, that boosting awareness among top management must be accompanied by significant investment in cybersecurity solutions and training workers to the highest possible standards.