The financial industry is a prime target for cybercriminals due to its high volume of valuable financial data and assets. Cybersecurity is critical to the financial industry’s success, protecting sensitive customer data, ensuring the integrity of financial transactions, and confirming compliance with regulatory requirements. Cybersecurity threats are constantly evolving, and financial institutions must remain vigilant in implementing and updating their cybersecurity measures. Negligence in doing so can result in substantial financial losses, reputational damage, and legal liabilities. The financial industry must continue to invest in cybersecurity to ensure the integrity of financial transactions and maintain the trust of its customers.
In this blog, we will study the significance of cybersecurity in the financial industry and provide supporting statistics for each of the key points.
- Protection of Customer Data:
The financial industry is responsible for storing a vast amount of sensitive customer data, including personal information, financial transactions, and banking details. If this data falls into the wrong hands, it might lead to identity theft, financial fraud, and other criminal activities. Therefore, safeguarding this data is critical to maintaining customer trust.
Supporting Statistics:
- In 2020, the financial sector accounted for 35% of all cyber-attacks globally. (IBM Security X-Force Threat Intelligence Index 2021)
- In the US alone, financial companies suffered 20% of all reported cyber-attacks in 2020. (Security Magazine)
- The moderate cost of a data breach in the financial sector is $5.9 million. (IBM Security Cost’s Data Breach Report 2020)
- Prevention of Financial Fraud
Cybercriminals use various tactics, including phishing scams, malware, and ransomware attacks, to exploit vulnerabilities in financial systems. These incursions can lead to considerable financial losses for both customers and financial institutions, affecting the industry’s reputation and profitability.
Supporting Statistics:
- In 2020, phishing attacks accounted for 80% of reported cybersecurity incidents in the financial sector. (PhishLabs)
- The transnational cost of cybercrime is assessed to reach $10.5 trillion by 2025, with financial services being one of the most affected industries. (Cybersecurity Ventures)
- The financial industry experiences the highest number of cyber-attacks, accounting for 35% of all attacks. (Source: IBM)
- Financial institutions have reported a 238% increase in cyber-attacks since the beginning of the COVID-19 pandemic. (Source: VMware)
- Compliance with Regulatory Requirements
The financial industry is subject to strict regulations regarding data protection, privacy, and security. Compliance with these regulations is essential to avoid fines, legal liabilities, and reputational damage.
Supporting Statistics:
- In the US, the financial industry is subject to several regulations, including the Gramm-Leach-Bliley Act, the Sarbanes-Oxley Act, and the Federal Financial Institutions Examination Council’s cybersecurity guidelines.
- In Europe, the General Data Protection Regulation imposes strict data protection requirements on financial institutions.
- Failure to comply with these regulations can result in significant fines and legal liabilities, such as the $700 million fine levied on Equifax for its 2017 data breach. (BBC News)
- Protection of Intellectual Property
Financial institutions rely on proprietary technology and intellectual property to maintain their competitive advantage. Cyber-attacks can compromise this information, resulting in significant financial losses and loss of market share.
Supporting Statistics:
- In 2019, the FBI reported that intellectual property theft costs US businesses up to $600 billion per year. (As per FBI Internet Crime Complaint Center 2019 Internet Crime Report)
- The intermediate cost of a data breach in the financial industry is $5.86 million, higher than any other industry. (Source: IBM)
- The financial industry has the highest cybersecurity budget allocation, with an average of $2,700 per employee. (Source: Deloitte)
- Phishing attacks accounted for 80% of reported cybersecurity incidents in the financial industry. (Source: Phishlabs)
Financial institutions are particularly vulnerable to intellectual property theft due to their reliance on advanced technology and proprietary algorithms.
The financial industry is a prime target for cybercriminals, and cybersecurity is essential to protecting customer data, preventing financial fraud, ensuring regulatory compliance, and safeguarding intellectual property. The statistics presented in this blog demonstrate the magnitude of cyber threats facing the financial industry and the need for continued investment in cybersecurity measures. Financial institutions must prioritize cybersecurity to maintain the trust of their customers, protect their reputations, and safeguard their assets.
How can EC-Council University help financial institutions upgrade their cybersecurity strategies?
The financial industry deals with sensitive and confidential information, making cybersecurity crucial to prevent cyber attacks that can result in significant financial losses, legal liabilities, and reputational damage. EC-Council University offers cybersecurity degree programs, industry-recognized certifications, and customized training programs that can help financial industry professionals enhance their cybersecurity skills and knowledge. EC-Council University’s programs can help professionals develop a deep understanding of cybersecurity threats and best practices to mitigate them. By investing in cybersecurity education and training, financial institutions can better protect their sensitive information and prevent cybersecurity risks.
