Understanding Cybersecurity And Why Is It Important In Financial Services?

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Financial services leaders must understand the vulnerabilities of their processes, networks, and computer systems to prevent cyber-attacks effectively. The first line of defense is constructing a tech firewall. These measures protect financial services from data theft and ad fraud.

Unfortunately, cyberattacks are becoming more common, and a more knowledgeable cybersecurity workforce is crucial to protecting companies. Read on to learn more about the importance of financial services cybersecurity and what financial services leaders can do to keep their organizations safe.

Increasing Volume Of Cyber-attacks :

Financial services companies are experiencing increasing cyber-attacks that can disrupt their IT infrastructure and cause huge losses. Cyber-attacks can cause damages of over USD 53 billion annually, affecting multiple financial institutions at once.

Fortunately, the attacks have not resulted in significant injuries. In 2018, numerous Dutch banks were hit by Russian-U.S. election meddling. The most potent DDoS attack against a European bank occurred in 2020.

Cyber-attacks aren’t going away, but they aren’t going away. Cybercrime actors, nation-states, and supply chain intrusions contribute to the rise in cyber-attacks. In addition, many industries are affected by these incidents. As a result, the government focuses on educating and training workers in cybersecurity.

Qualified Cybersecurity Professionals :

Companies across the globe face a serious shortage of cybersecurity talent, and a recent study by the World Economic Forum estimates that there were three million job openings worldwide before the Ukraine invasion.

That number is expected to rise further, thanks to the exodus of as many as 70,000 technical workers from Russia. While many will eventually find new jobs, others will simply be relocated. Despite this shortage, government agencies must continue to recruit cybersecurity talent, despite the increasing demands and soaring salaries.

A new initiative by Microsoft to increase cybersecurity education has highlighted the growing cybersecurity skills shortage. The company recently announced plans to award scholarships to 25,000 cyber-focused students and support faculty at 150 two-year colleges across the country.

This new program aims to fill an estimated 250,000 cybersecurity jobs over the next four years. In addition, a study by the Commerce Department found that over half a million cybersecurity jobs are currently unfilled in the U.S. alone.

Impact Of Regulations On Cybersecurity :

As consumer confidence dwindles, regulations are stepping in to protect consumers from fraud. Although the financial services industry generally provides a reasonable level of cybersecurity protection, the growing cost of resilience and compliance may prevent firms from enhancing their defenses.

As a result, competition between firms is decreasing, which is terrible for consumers. Instead, regulations may create an excellent opportunity for companies to improve their cybersecurity capabilities. In the meantime, it’s a good idea to get started now.

While many people may think that cybersecurity regulations impose undue burdens on the industry, they are an effective way to hold the financial services industry accountable for its cyber security efforts. However, these regulations must be adaptable and flexible enough to reflect the rapidly evolving threat landscape.

Financial services providers must continuously update and revise their information security standards and regulations to keep pace with the evolving threat landscape. In addition to implementing new information security standards, financial institutions must also comply with existing laws.

Need For Collaboration On Cybersecurity

The challenge of cybersecurity in financial services is a national security issue that must be conceptualized holistically. While the government has made progress in defining the problem and developing authorities to justify deeper collaboration, the implementation process remains mired in stale information sharing models, low-context “tear lines,” and irregular classified briefs. Deep active cooperation is needed to address the problem’s sweeping scope and scale.

Private sector organizations have begun working with each other to develop playbooks for a coordinated response to cyberattacks. These playbooks should be integrated into the entire policymaking process, feed back into intelligence collection efforts, and guide capability development.

Moreover, they should be dynamic documents that are exercised over time. By leveraging the skills of private sector companies and government agencies, fully articulated playbooks can help the government coordinate national cybersecurity defense for financial services and critical infrastructure.