Cybersecurity Services For Financial Industries – Why Is It Important?
"Cybersecurity Services for Financial Industries" is a topic to address at utmost priority. Do you agree? Let's understand why it is so.
Over the past decade, we have witnessed an evolution in the finance sector. Due to rapidly growing digitalization, the finance sector has implemented advanced technology that makes financial transactions easier for customers.
Moreover, the technological revolution has played a significant role in uplifting the finance businesses. Most modern industries rely on big data to expand their market share by understanding consumer behavior.
While this growth is highly beneficial for both customers and banks, advancement of technology and increasing reliance on internet banking come with an inevitable disadvantage, i.e., Cybercrimes.
The financial sector is not the only sector that is vulnerable to cyber threats. But, since banks and other financial industries have to access a massive pool of consumer information and deals in millions every day, cybersecurity is essential for this sector more than any other industry.
A robust cybersecurity system will protect all confidential information from cyber predators and ensure that your institution complies with safety requirements.
This detailed guide on Cybersecurity Services for financial institutions will help you understand all the common cyber threats that the industry faces & why an effective cybersecurity system is crucial for modern banks and financial institutions.
Let us first look at the cybercrimes that are prevalent in the finance sector.
What Are The Common Cybersecurity Concerns Faced By Financial Industries?
E-commerce shopping has been growing tremendously over the past five years, and Covid-19 has fuelled this blazing fire, boosting internet shopping.
Along with e-shopping, the use of third-party payment gateways is also increasing, which is a significant threat to banking networks. Even if the financial industries are equipped with all the necessary security measures, cybercriminals find their way to customer data through these third-party payment gateways.
These crimes are often known as spoofing. Without a strong network, these crimes can pose a severe threat to consumers and their financial information.
Phishing is the most common type of cybersecurity danger faced by financial industries.
It is a strategically engineered scheme where hackers pretend to be bank representatives and offer enticing deals to customers in exchange for their personal information.
Phishing is most commonly done through email. The recipient is emailed a malicious link; when clicked, it causes their PC to freeze and allows the hackers to access their personal information like credit card information and banking details.
As suggested by the name, these types of attacks involve ransom. The cybercriminals gain access to private data, seal it and then blackmail them in lieu of ransom.
Denial Of Services
Denial of services is a type of cybersecurity attack in which hackers flood a website or service (such as e-banking) with excessive requests, overloading or destroying it. This does not harm the consumer data, but an inefficient browser can negatively impact the bank in their minds.
Now that we know all the common cyber attacks that can be dangerous for consumer data, let us understand the financial institution's problems when cyber criminals attack their servers.
It will help you better understand the importance of having a solid & secure cyber network.
Importance Of Cybersecurity Services For Financial Industries and Banks
Negative Impact On Reputation
Data breaches can result in the loss of consumer data and even banks' confidential data. Consequently, they are a serious problem for banks and finance organizations. When a bank's client data is compromised, it becomes difficult for customers to trust the bank.
More often than not, the reason behind data breaches is a weak cybersecurity system.
As a result, banks and financial institutions must have appropriate cybersecurity elements to ensure that existing security criteria are followed and that critical consumer data is well-protected.
Financial Loss To The Customers
When a bank suffers a data breach, it damages its reputation and costs its clients money. In most cases, a consumer who loses money due to card fraud can get it back from the bank.
However, in circumstances such as data breaches, recovering funds takes time, which is quite stressful for customers and ultimately leads to dissatisfaction.
Therefore, to keep client funds safe from criminals, every bank must deploy cybersecurity safeguards to protect consumer data and protect their assets.
Legal Fees For Non-Compliance
Since banks and finance organizations are responsible for vast amounts of monetary funds, they have to abide by specific guidelines to ensure consumer data protection.
Banks are required to comply with rules and adopt proper cybersecurity safeguards to prevent cyberattacks.
If they fail to follow the guidelines and become victims of cyber attacks, the FDIC will impose additional penalties. And, no bank wants to be penalized for non-compliance on top of cyber threats since it is financially taxing and can hinder their reputation.
Negatively Impact Consumer Loyalty
A breach of a bank's cybersecurity can cause havoc in both its clients' and employees' lives. Even if the customers block their card or internet access, the hackers can use their data in the future for fraudulent transactions.
As a result, customers would not only lose their personal and valuable data, but they will also have to go through time-consuming legal procedures to avoid any damage.
On the other hand, the bank will have to undertake the time-consuming work of scrutinizing statements and every financial activity, canceling cards, and keeping a careful eye on the situation in case the data is compromised.
All this ultimately leads to dissatisfied consumers who would no longer want to avail themselves of your bank/institution services.
Threats From Mobile Applications
It is no secret that the wave of digitalization is in full swing, especially after Covid-19. From small tasks like food orders to important transactions like payment of bills, everything is online nowadays.
Therefore, it is more vital than ever for banks to improve their banking apps, as hackers can easily access these applications if sufficient cybersecurity safeguards are not in place.
The reasons mentioned in this article are enough to highlight the importance of Cybersecurity Services for banks and other financial institutions. Neglecting cyber safety is not a mistake that modern finance organizations can make.
To keep your financial business data safe and secure, we recommend using professional help from cybersecurity consultants. At Parity Systems, we can help you with a wide array of cybersecurity needs. For more information, contact us today.