In a digital age where data breaches and cyber-attacks are increasingly common, the emphasis on data security in the financial services sector has never been higher. Here are 5 substantial benefits that highlight the importance of financial cyber security.
1. Long-Term Customer Trust
Financial services companies handle sensitive information daily, from personal details to transaction histories. Certifying robust cyber security builds enduring customer trust and protects a company's reputation. Financial firms can use security measures to protect customer data. These measures include user authentication, device management, and other protocols.
2. Compliance and Regulations Alignment
The financial services sector is subject to strict regulations like GDPR, CCPA, and HIPAA. Adhering to these data protection standards is crucial to avoid substantial fines and legal repercussions. For example, Wells Fargo has just paid over $125 million in legal fees because they were using an app that wasn’t compliant with business communication standards. One 2022 survey by Fintech Global reports that 44% of compliance professionals struggle with challenges related to data management.
By prioritizing cyber security, and utilizing comprehensive security systems like Microsoft Purview, organizations are assured they align with compliance guidelines. Carefully analyze these guidelines applied to your location, as they will offer increased protection down the road.
3. Minimize Financial Risk
Data breaches result in significant financial losses due to direct costs associated with the breach, regulatory fines, and lost business from reputational damage. These breaches affect organizations big and small, which highlights the cruciality of cyber security. On average, FinServ organizations lose 5.9 million per data breach. A recent study discovered that financial firms can save $1 million by investing in security AI and automation tools.
In addition to the initial breach remediations, they are also expensive as they disrupt operations, causing resource downtime and productivity loss. Financial services should consider many cost-effective solutions to reduce costs without sacrificing value. When shopping for the right tool or solution, look for those that come with technical support plans, automatic updates, or are cheaper as packaged security solutions.
4. Protection Against Identity Theft and Fraud
Another reason cyber security is so important for financial organizations is safeguarding data from Identity theft and fraud. This is when cybercriminals use stolen data for unauthorized transactions or opening fake accounts, and is devasting to your business, and its customers. Phishing is the most common form of attack, and can be prevented with email best practices, training, and monitoring systems. Layer data security across your environment, tools, and users to create a critical defense against these threats. This is a concern of most customers, so advertising your security practices that safeguard their information is highly beneficial.
5. A Competitive Advantage
Data security best practices provide a competitive edge, differentiating a company in the financial market. Financial organizations that detect vulnerabilities quickly, retain customers longer, and rescue clients leaving other companies. To maintain a competitive advantage, conduct regular gap assessments to identify weaknesses to ensure your processes and systems are operating at maximum efficiency.
One practice many financial organizations are implementing is called Zero-Trust, and implies continually monitoring, and not trusting the user, device, or network, until verified. Organizations that enlist Zero Trust are susceptible to fewer breaches and have a more sustainable foundation for long-term growth.
Cyber Security Measures for Financial Services
What actions or measures can be taken to improve or ensure top cyber security? Access controls, encryption, and data masking protect information from unauthorized access. Many partners that specialize in security offer Fintech trainings that lock in security with best practices and awareness tips.
Risk assessments have also been created for organizations of every industry, especially FinServ, to conduct regularly. These assessments identify current and potential vulnerabilities threatening the security of an organization’s infrastructure. These Assessments do this by auditing your data, its systems, integrations, users, and processes carefully so you can remediate small threats, before they turn into a breach.
Many technology partners offer security assessments that evaluate devices, Endpoints, data, applications, etc., to dive deep into the workings of your tenant. Working with a technology partner to conduct annual security assessments ensures your access to your data is secure.
Your Journey to Financial Security
It’s clear how important it is for financial organizations to implement robust data security measures.
To see more of these benefits hit your business, contact a Modern Work and Security Specialist today.