Global financial institutions are becoming more concerned with cybersecurity. Even though financial institutions spend millions on cybersecurity annually, most banks and other financial institutions remain vulnerable to cyberattacks and data breaches. By following cybersecurity best practices, you can avoid nearly 90 percent of data breach. Data from financial service organizations is attractive to cybercriminals because they can quickly be sold, and even sell, users’ personal data (Didenko 2020; Bouveret 2018, 2018). Around 25% of all break-ins occur due to staff errors. Both accidents and safety violations can cause severe disruption and damage, such as firm closure, regulatory fines, income loss, customer distrust, or loss of confidence.
Over the past three decades the cost of hacking financial institutions around the world has steadily risen. This poses a threat to global financial stability, which is a concern that top bank executives regularly raise with Congressmen in 2020. Because of its severe consequences and high costs, cybersecurity is a top concern for the regulators. Authorities create security structures that contain guidelines, standards and strict restrictions to prevent cyberattacks and strengthen cybersecurity regulations. In severe cases, sanctions may apply for failure to comply. Nonetheless, many financial services companies lack robust continuing cybersecurity procedures (Calliess & Baumgarten, 2020). Financial services firms spend millions to secure their systems but they often ignore the most important best practices that can be used to prevent five of the most common security threats. Challenges. These people don’t realize, for example, that older security strategies and methods aren’t viable anymore in todays virtualized environment. They also do not believe local security solutions are sufficient. Cloud-based technology and tools must be used in addition to traditional cybersecurity guidelines.
The human contacts can make even the most complex cybersecurity systems vulnerable to a simple malicious action. Their digital footprints and cyberattacks will increase as financial institutions switch to digital channels, such as mobile banking, online transactions, and IoT. A business’s ability to offer its customers virtual channels increases the likelihood of fraud. One or more cyber banking crises could cause financial chaos for both clients and the banks as well as the entire national financial system.
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