Cybersecurity in financial services presents unique challenges in strengthening resilience against potential threats. Financial institutions not only need to combat cyber threats such as web application attacks, bad bots, ransomware, and phishing attacks, but also maintain uptime before, during, and after such breaches to ensure seamless customer service and regulatory compliance.
The cost of cybersecurity risks
According to IBM’s Cost of a Data Breach Report 2024, the global average cost of a data breach reached USD 4.88 million, a 10% increase from the previous year and the highest total ever recorded. A third of breaches involved shadow data, highlighting the difficulties in tracking and safeguarding proliferating data. Organizations using security AI and automation extensively in prevention reported average cost savings of USD 2.22 million compared to those that didn’t. Beyond these staggering statistics, financial institutions face even greater fears in lost business costs, including increased customer turnover, lost revenue due to downtime, and the rising cost of acquiring new business due to diminished reputation.
Regulatory landscape
The FFIEC (Federal Financial Institutions Examination Council) has strengthened its mandates for operational resilience, business continuity, and crisis management within the financial sector. This increase in regulation and compliance expectations underscores the necessity of automation across operational risk areas to achieve efficiency in processes, knowledge, and impact assessment. Regulators focus on the impacts of operational outages and their industry-wide effects, requiring detailed tracking, audit logs, and evidence of executive oversight.
The importance of cyber resilience
For financial services to succeed amidst heightened regulatory requirements and complex digital threats, cyber resilience extends beyond simply remediating attacks. It involves maintaining a reputable and trustworthy brand and product for customers. Organizations must prioritize building a resilient operation so that any disruption, whether from a cyberattack or other causes, has minimal impact on customer experience and avoids major non-compliance fines. Through digital transformation and a commitment to automation, financial institutions can build maximum operational resilience, enhance customer experience, and achieve positive returns on technology investment.
The domino effect of disruptions
Digital disruptions in large financial firms can have cascading negative impacts. Cybersecurity-related risks can lead to direct costs for affected banks and ripple effects on counterparties within the financial sector and the broader economy. Becoming cyber resilient means more than shielding against a single disruption; it requires active prevention against the negative domino effect such disruptions can trigger. With much of the financial sector’s success rooted in customer trust, falling victim to a chain of events that impact on the economy puts institutions at high risk of lost business. It truly pays to be prepared.
Operational resilience through digital transformation
Innovations in incident management, including greater automation, integration, data-level visibility, and user-friendly advances, support the infrastructure necessary for uninterrupted customer experiences. Everbridge critical event management can help financial services establish and maintain ‘Operational Resiliency ROI’ by minimizing business downtime and accelerating incident resolution through automated communications, collaboration, and orchestration. It streamlines incident response across IT Ops, Service Ops, Sec Ops, DevOps, and IT BC/DR, equipping employees with the information and resources needed to support digital transformation and deliver uninterrupted customer experiences.
For more insights, watch our webinar on cybersecurity preparedness and protection.