Emerging Risks in 2019 for the Financial Service Industry
Posted: 21st June 2019 08:02
The financial service industry is highly sensitive since it’s involved in the collection, storage, and transmission of sensitive private information. The abundance of this data attracts malicious individuals who aim at obtaining it for criminal use. As such, there is a need that your organization establishes effective measures to protect the data.
The more your organization digitizes its operations, the more it will be exposed to cybercriminal activities. This article highlights various emerging risks that are associated with the digitalization of your organization’s operations.
Risks in Financial Services
Impacts of the Current Cybersecurity Breaches on the Financial Services Industry
This section will analyze the 2019 Verizon Data Breach Investigations Report that enumerated the cybersecurity trends and how each development affects the financial service industry. Below are the findings of this authoritative report:
According to the report, there are scores of data breaches cases across different industries. This proved that no organization is immune to cyber-attacks. The financial service sector was fourth in the rankings based on the frequency of the attacks. It recorded 927 incidents with 207 confirmed to have had data disclosure.
The Top 3 Patterns
Understanding the patterns of attacks is essential in establishing data breach prevention measures. The top 3 most affected categories constituted approximately 72% of all the data breaches reported in 2018. These categories include:
- Privilege misuse
- Web applications
- Miscellaneous errors
Besides the patterns, you’ll need to fathom the attack origin to develop a comprehensive security system. You shouldn’t make the mistake of over-concentrating on the external attackers while neglecting the internal attackers. It has been established that over 33% of the threat actors are within an organization. Consider the following threat actors when formulating your security systems:
- External Actors (72% of the attacks)
- Internal Actors (36%)
- Multiple Partners (10% of all breaches cases)
- Partners (2% of breaches)
- Data Compromised
- Personal Information (43%)
- Individual’s Credentials (38%)
- Internal Information (38%)
New Regulations and Standards: How they Impact the Financial Services Sector
There are specific standards that your organization should comply with to receive certification which guarantees continuous risk management. While the process of aligning your business with the requirements of regulatory bodies is expensive, it’ll yield a lot of benefits in the long run. It will not only boost your client’s confidence but also help you in avoiding penalties of non-compliance, which would otherwise be detrimental to your business.
General Data Protection Regulation (GDPR)
This is a broad privacy law that governs the use of personally identifiable data in the entire EU. The law also affects everybody else outside the EU but handling any form of data involving the EU citizens.
The GDPR gives the owner of the data the right to opt out of any data sharing arrangement. Also, it mandates the financial institutions to provide the details of all the persons receiving the private data or delete it upon request by the owner.
California Consumer Protection Act (CCPA)
This law affects all profit-oriented organizations operating in California and those that meet the following requirements:
- Gross revenue above $25 million
- Purchases receive, sells, or shares any form of personal information to at least 50,000 consumers annually
- Earns half of its annual revenue from selling personal information
The Assurance that Comes with Continuous Monitoring
When you audit your business continuously, you will get in-depth reports that will prove your compliance with all regulatory authorities. It’s necessary that you apply automatic and real-time monitoring system to help you detect the slightest anomaly in your operations. This will build confidence among your customers and improve your business.
The regular updating of your systems will ensure that your data is protected despite the ever-evolving nature of the cybercrime activities. It offers you with crucial insights to make improvements on your systems, thus guaranteeing top-notch systems. Whenever you make the updates, you should train your staff for proper implementation.
The Use of Technology in Managing Emerging Risks in the Financial Services Industry
Complying with regulatory standards require a multi-disciplinary approach with regular communication between the external and internal stakeholders. To achieve this, you should use automated tools to enhance a flawless report making and presentation process. The tool consolidates all the information required for continuous auditing,making it easier and cost-friendly.