IT data security is extremely important for all businesses, but it is critical to the financial industry where millions of dollars may be at stake should a data breach occur. Most cyber-attacks hijack data for profit. Financial institutions have become a coveted target for unscrupulous hackers looking for vulnerable security systems.
Deloitte states that “IT risk-related challenges in financial services will grow in number and importance in the years ahead.” With more breaches expected on the horizon, the financial services marketplace needs to incorporate internal strategies, decrease IT instabilities, protect their data, and update their technological hardware and software.
This article can help your financial institution identify the biggest risks your organization may be currently making, along with steps you can take to protect yourself.
Risk #1: All Companies Are Created Equal...For Data Breaches
IT risks can hit any businesses that isn’t properly protected. It all depends on the vulnerabilities that exist.
In the last few years alone, there have been numerous data breaches across every industry sector:
- In 2017, Equifax experienced a data breach that affected 143 million U.S. consumers
- In 2014, JP Morgan Chase experienced a cyber attack which compromised the personal information of more than 76 million households and 7 million small businesses.
- Over 15 million card holder accounts were compromised at a cost over $90 million when Global Payments experienced a data brief in 2012.
Even industry leaders like eBay, Target, Sony Pictures Entertainment and The Home Depot have all experienced data breaches. It's not just large corporations that are targets though. In fact, small businesses are the majority of breaches but it doesn't make headlines like larger companies. If you haven't suffered a data breach, it's not a question of it will happen, but when it will happen! Ensuring your organization has protocols in place for proactive AND reactive steps is a necessity in today's business world.
Risk #2: Saving Money Now May Mean Paying More Later. A Lot More.
In 2018, IBM sponsored the Cost of Data Breach survey, which was conducted by Ponemon Institute. It showed the devastating effects that a data breach can have on a financial institution. The study showed that average global cost for a data breach increased by 6.4% in 2018. The statistics are staggering:
- In 2018 the average total cost of a data breach increased to over $3.86 million dollars
- The cost of each lost record went from $141 to $148
- The average size of a data breach increased by over 2%
Choosing a low-cost tech support solution, hiring a barebones in-house IT team, or ignoring any cybersecurity steps entirely may be saving your company money now, but you may end up paying significantly more in the long run. A more proactive approach is necessary. Who and what is protecting your data? You need to know!
Risk #3: IT Risks Constantly Evolve. Your Approach Should Too.
Many financial institutions are negligent about updating their technology and are still using legacy programs that leave them vulnerable for cyber-attacks. In fact, 90% of financial organizations feel they are at risk of IT threats.
In 2015, the Carbanak crime group targeted over 100 different financial institution in at least 30 counties at a loss of over $1 billion. With these IT risks all around them, more high-risk industries like finance, retail and healthcare are looking to invest in data security.
Some of the key areas of concern include:
- Identifying risk
- Protecting against threats
- Detecting threats that make it past protection measures
- Incident response
- Disaster recovery
Reduce IT Risks with Professional Support:
There’s no doubt that many organizations are at risk of losing their data because they have not updated technologies to keep ahead of exploits occurring now. Often, it’s because threats are seen as an "IT" problem rather than a business problem and not enough emphasis is placed on finding appropriate solutions.
The best way to combat IT risks is to hire professional managed service providers (MSPs) to implement best practices for what's in place now, find gaps and solutions to bolster the 5 areas above, and continually improve.
One of the top providers is CompassMSP which can help lead initiatives to provide the latest tools and stay on top of new trends like transitioning to secure cloud computing and adding extra security where needed. An ounce of prevention is worth a pound of cure when it comes to protecting your business.