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Cybersecurity in Financial Services: Protecting Digital Assets

Cybersecurity is a constant battle for financial services firms. Although many companies have invested in cybersecurity, they often haven’t considered the unique threats posed by remote work and digital transformation. This post will help you understand how to build a cybersecurity culture that protects digital assets across all your teams and locations, no matter where they are working.

The Digital Transformation of Financial Services

The digital transformation of financial services is a complex and multifaceted challenge that requires a comprehensive approach to security and risk management. It's not just about protecting your systems, but also ensuring that you're meeting regulatory requirements and providing an excellent customer experience.

This is not just about technology; it's also about culture the kind of culture that embraces change adapts quickly, thinks differently (and creatively), uses data analytics in innovative ways, takes risks when appropriate, collaborates across silos...and on it goes! But this isn't something you can do overnight; it's a journey with no endpoint. The key is to commit yourself to continuous improvement as you learn more about what works best for each organization under its unique circumstances.

Moreover, if you're considering expanding your financial services business internationally, it's essential to explore opportunities in various jurisdictions. For example, you might want to start a company in Cyprus, which offers a strategic location and a favorable business environment within the European Union. Cyprus provides an attractive tax regime, access to a skilled workforce, and a well-developed financial sector, making it a compelling choice for businesses looking to grow their global footprint.

The Stakes: Protecting Digital Assets

Digital assets are the lifeblood of a financial services company. They're what keep your business running, allowing you to interact with customers and partners, process transactions and payments, and manage risk. But they're also highly vulnerable to cyberattacks and if they get hacked or stolen, the consequences can be devastating. In fact, according to Accenture's 2019 Global Economic Crime Survey report:

  • 85% of companies surveyed said they had suffered at least one significant data breach in the last year (up from 77% in 2018).

  • 65% reported experiencing multiple breaches during this period and those businesses were more than three times as likely as those reporting only one breach (21%) or none at all (6%) to suffer financial loss due to cybercrime.

Building a Cybersecurity Culture

In order to build a culture of security, organizations must first understand what they are trying to achieve. Organizations have many different goals when it comes to cybersecurity:

  • Compliance with regulatory requirements: Ensuring that the company adheres to all relevant laws and regulations regarding data protection and privacy is a top priority.

  • Protection of their brand and reputation: A security breach can severely damage a company's reputation, leading to a loss of trust among customers and partners.

  • Reduction in costs associated with breaches or data loss: Data breaches can result in significant financial losses, including fines, legal fees, and the cost of mitigating the breach's impact.

To achieve these goals, organizations need to make sure that employees understand why they're doing what they're doing. One way companies can do this is by developing a cybersecurity policy that clearly articulates how employees should behave when interacting with technology and sensitive information. 

Moreover, if your organization operates internationally or plans to expand its operations abroad, it's crucial to consider company registration in Latvia. Latvia offers a strategic gateway to the European Union market, with its favorable business environment, skilled workforce, and business-friendly policies. Registering a company in Latvia can provide your organization with a valuable foothold in the EU and access to its vast consumer base. This strategic move can also enhance your company's global presence and support your international business objectives.

Once you've created your cybersecurity policy document (and hopefully communicated it), you need strategies for getting people onboard with its contents and then holding them accountable for following them!

Technological Defenses

  • Encryption: Encrypting data can be done in a variety of ways, but the most common is to apply an algorithm that transforms plain text into unintelligible characters. The process involves converting letters and numbers into a ciphertext form using an encryption key. When you want to decrypt the information, you use its corresponding decryption key, and voila! You have your original data back again.

  • Authentication: In order to access sensitive information or systems on a network, users need their identities verified before they can get in (this is known as authentication). Along with passwords and PINs, there are many other ways for businesses to verify who someone really is when they log on: biometrics (fingerprint scans), smart cards containing microchips with unique codes stored inside them; and even something as simple as asking questions about personal history only known by insiders like former colleagues or family members.

  • Authorization: Once someone has been properly authenticated through various means such as passwords/PINs or biometrics etc., they must also be authorized before being allowed access rights within those systems so that only authorized personnel are able to make changes within them.

Third-Party Risk Management

Third-party risk management is an essential part of any cybersecurity strategy. The fact that third parties are often responsible for handling sensitive information or accessing critical systems means that they can be an entry point into your organization's network and data, creating opportunities for malicious actors to gain access.

To mitigate this risk, you must identify all of your third parties and then assess their security posture against industry standards and best practices. You should also develop clear guidelines for how these organizations will be managed in terms of access rights, monitoring activities, and incident response plans in the event of an attack on their infrastructure or personnel.

Cybersecurity Challenges in Remote Work

While working remotely can be more secure than working in the office, it's not necessarily more secure than working from home or a coffee shop. In fact, remote workers are often exposed to the same cybersecurity threats as their on-site counterparts because they don't have physical access to security devices and systems at all times.

For example, if your company doesn't require you to use two-factor authentication for access into critical systems (such as VPNs), then it's possible that hackers could gain access by impersonating an employee with one factor: their username and password credentials! This is why we recommend using multi-factor authentication wherever possible when working remotely so that you can minimize this risk while boosting overall security levels across all digital assets within your organization.

With the increasing adoption of digital banking and payment systems, financial institutions need to prioritize cybersecurity. Financial services have long been a target for cybercriminals because they hold valuable data and assets that can be used for fraud or extortion. With security breaches occurring at an alarming rate, it is imperative that banks invest in strong defenses against attacks both internal and external ones. In addition, these institutions should work closely with third parties who handle their sensitive information (such as vendors providing IT support) to ensure proper data protection measures are being taken at every level of operation.

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