The need for cybersecurity in the financial industry has quickly grown over the past several years. Since COVID-19, the FBI has reported a 300% increase in reported cybercrimes. Financial services are the #1 target, which is why it is even more important that banks, investment firms, insurance companies, and other members of the financial sector protect themselves.
Protecting your organization against cyber-attacks not only involves understanding the harm but understanding if you have the strategy in place to ensure safety.
Here are five reasons why cybersecurity matters to the financial sector and how your security strategy can be made stronger and safer with a Managed Service Provider (MSP).
You have data.
And a lot of it. The financial industry sits on a treasure trove of data, gathered both from the clients themselves, and from what is publicly available. A single breach could give hackers access to valuable information on clients that they can use to further extort those clients. The U.S. Securities and Exchange Commission issued a Ransomware Alert in July 2020 warning of increased sophistication of ransomware attacks on SEC registrants. The best way to protect your data is to allow it to be backed-up at a highly secure SOC data center that is provided and protected by an MSP.
Hefty Fines for Breaches.
If a breach does happen, the Federal Trade Commission and other regulatory agencies could come down hard on the financial institution responsible for allowing the breach to happen without proper cybersecurity protection in place. In 2019, Equifax paid an estimated $575 million as part of a settlement for their 2017 breach. Compounding the costs of the breach itself with any potential fines can be devastating to any business. Using a dedicated Managed IT Services Provider who specializes in data security gives you the protection you need.
Perhaps the only thing worse than the financial ramification of a breach is the damage done to a company’s image and reputation. The financial sector is one of the most trusted industries, and for good reason. Anything that damages that trust can hurt not only the company involved, but the whole industry. Because every state has legislation on when, how and to who a breach must be disclosed, it is almost certain that a breach will be made public.
While any company may want to be discreet and only disclose their breach to proper authorities, there is a good chance that the hackers will make the information public simply by publishing data onto the internet. Depending on the type of breach, financial service providers may need to inform the clients who were affected, which is never a good thing to have to do. While an MSP cannot get your reputation back, they can help prevent a PR nightmare before it begins by providing you with all the tools and protections needed to stop or minimize a breach.
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Every company, organization, and industry use third-party vendors. A recent study by SecureLink found that 51% of organizations have experienced a breach by a third-party. The financial industry is no different. It’s important to know exactly how many third-party vendors you have, and how much access to data each one is allowed. You also want to make sure those vendors are as secure as you are.
Flagstar Bank in Michigan learned this the hard way as a vulnerability in a third-party software led to a devastating ransomware attack. Most organizations make the mistake of trusting vendors based solely on reputation or signed contracts. It is important to vet every single third-party vendor and to make sure they are given appropriate access and no more than what is needed. New legislation is putting responsibility on the organization for breaches, not the third-party vendors who caused the breach. A trusted MSP can help you implement proper security and access measure to better protect your system in the event a vendor experiences a breach.
Have you thought about how cyber-security might affect your financial business via a client-relationship? According to the Verizon Data Breach Investigation Report, 28% of data breaches involve small businesses. How does that affect the financial industry? What if one of your clients fell victim to a business email compromise (BEC), and accidentally paid $500,000 to bad actors. This not only cripples their business but causes them to default on a loan being held with your business, or the funds in their Demand Deposit Account become drained. The domino-effect from a single cyberattack can be catastrophic, which is why more and more financial institutions are demanding that their clients have some form of cyber-liability insurance. This scenario does not even include what would happen if bad actors were able to get ahold of client account information, which is a major possibility when you consider that 52% of data compromised is credentials. Like with third-party vendors, having an MSP that can work with you when clients are compromised to make sure your financial business is safe is a must.
An MSP You Can Trust.
Not all MSPs are created equal. Stronghold Data is a 2021 CRN MSP 500 and a 2021 Channel E2E Top 100 Vertical Market MSP company. Stronghold Data offers a wide variety of tools and managed services and has an underground SOC II Compliance Data Center to keep your financial institution safe and secure. Contact us today to learn how Stronghold Data can help you.