Financial firms in the United States face a staggering 1 billion cyber-attacks every year. This is 250 times more attacks than the average business. If you run a financial institution, you need a solid cyber security plan for multiple reasons. The following are a few important examples.
1. Financial Firms Face a Heightened Risk of Attacks
As indicated above, banks, credit unions, and other financial services firms are more likely to face cyber-attacks than other businesses. The average financial services company faces 30 attacks per second.
2. Financial Losses from Cyber Attacks Can Be Crippling
On average, financial services firms spend $18 million to address a cyber-attack, while the average for other industries is just $12 million. In addition to direct losses, businesses can incur costs associated with the following:
- Finding the breach
- Stopping the theft of information
- Notifying affected customers
- Offering services such as identity theft protection
- Investing in new security tools
- Dealing with the rest of the attack’s aftermath
3. Financial Institutions Store Sensitive Customer Data
Cyber criminals don’t just steal cash from banks. They also steal information. Financial institutions store a lot of personal data about their customers, such mothers’ maiden names and account numbers. Thieves can use this information to steal identities, open bank accounts, or apply for credit lines. They can also sell such data on the dark web.
4. Cyber Theft Hurts Your Reputation
Consumers prefer to patronize businesses they can trust. This need for trust is even stronger in the financial services industry. People will not keep their money in a bank that they cannot rely on.
Cyberattacks can seriously damage your reputation. After an attack, many customers will simply close their accounts and take their business elsewhere. In addition to affecting your customer retention rates, cyber theft can mar your ability to attract new clients.
5. Businesses Can Face Fines for Lack of Cyber Security
Financial institutions may face fines and penalties if they are not compliant with industry regulations. For example, when Equifax lost data on 147 million Americans, the Fair Trade Commission (FTC) levied a $700 million fine. It also required the company to improve its data security efforts.
You need a solid cybersecurity strategy consisting of tools, services, and processes. They should also address the unique cyber threats faced by your financial institution. We handle customized cyber fraud plans so you can focus on running the rest of your business. Contact SQN Banking Systems today to learn more about our services.