If you’re in the financial services industry, you know the importance of protecting your customers’ sensitive data.
Unfortunately, a hacker can gain access to much of that sensitive data with a single cyber attack. And despite advancements in cybersecurity measures, cyber attacks continue to impact companies of all sizes and industries.
What’s worse, the resulting costs of these cyber attacks continue to increase.
[This article is part of our Guide to Cybersecurity]
What is the Economic Impact of Cybercrime?
According to the FBI’s 2022 Internet Crime Report, businesses across the globe lost $10.3B because of cybercrime last year. In 2021, businesses lost $6.9B.
And in 2023, 75% of security experts said they saw an increase in cyber attacks when compared to the previous year.
While hackers use a variety of cyber attacks, such as malware, spoofing, and phishing, much of the economic damage comes from the costs associated with data breaches.
What are data breaches?
Data breaches often result in hackers stealing sensitive data from your employees, partners, and customers. But sometimes, data breaches can infect your IT infrastructure with malware or viruses.
There’s a lot to your IT infrastructure, given that it consists of your company’s hardware, software, systems, and networking components. It can be costly (in terms of both time and money) if it becomes infected because of a data breach.
Because if a data breach shuts down your system, your financial services business grinds to a halt.
What is the average cost of a data breach attack?
Businesses are spending more and more every year to deal with the resulting damages of cyber attacks – especially data breaches.
The average cost of a breach reached its highest point to date in 2023, at $4.45M per breach. For financial services companies, that number was $5.9M per breach – 28% more than other sectors.
This makes sense, in part because financial services businesses must meet certain regulatory requirements specific to their industry.
What can happen when you have a data breach
Several things can happen to your financial services company if a hacker succeeds with a data breach attack:
- Your customers can have their financial data exposed, leading to expensive lawsuits against your company – not to mention the PR nightmare that could ensue.
- Your company can fall out of compliance with regulatory laws, leading to significant fines and penalties.
- Your remediation costs can skyrocket. Remediation can be costly, since it involves repairing damages to your IT infrastructure and addressing any vulnerabilities that result from an attack.
These costs will certainly harm your business – but the consequences of data breaches can go far beyond financial ramifications.
The Damaging Impacts of Data Breaches
Operational Impact of a Data Breach
Consider this example: If an employee is working on an important project for a customer when the downtime occurs, that project is likely to miss its deadline.
If a data breach introduces malware that shuts down your entire infrastructure, you will lose untold numbers of productive work hours. Your employees will need to divert their time and energy elsewhere until you restore your infrastructure.
Employee Impact of a Data Breach
No one wants to miss a deadline because a data breach keeps them from working. If a breach causes system downtime, they will likely need to work harder to make up for the lost time. It’s understandable that a breach can lower your employees’ trust in your company’s systems – and none of this is great for employee morale.
Customer Impact of a Data Breach
Your customers won’t be happy if they were relying on something that could not be completed on time as a result of your downed IT infrastructure. But that’s nothing compared to the frustration they will experience if the data breach compromises their financial data.
Reputational Impact of a Data Breach
The damage to your reputation as a result of a breach may be the most impactful. As a financial services company, you understand the importance of your customer’s confidence in your company. You are, after all, often handling some aspect of their money.
You’ve carefully crafted trust with your customers over time. A single data breach can lead to a loss of that trust – and the impact of that loss can be felt for years.
Why cybersecurity costs are worth it
For adequate protection, you need to work with a managed service provider (MSP) like InfoSystems.
Think of any costs you incur from working with an MSP as preventative – because you are likely to pay much more to mitigate the impacts of a data breach.
A proficient MSP will help you prioritize your cybersecurity initiatives by:
- Identifying and containing cyber threats
- Helping you create a cybersecurity plan for addressing cyber attacks
- Testing and improving solutions to protect against cyber attacks
- Training your employees on new cybersecurity practices and solutions
InfoSystems Can Serve as Your MSP to Help You Prioritize Your Cybersecurity
Don’t wait until your financial services organization suffers from a data breach or other cyber attack.
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