The hidden costs of a cyberattack are just that—hidden, below the surface, a ripple effect that can last for years to come. IT companies are quick to share stats about the average cost of a data breach (now at over $5 million) but what goes into those calculations? And is that just a loss of revenue or an all-encompassing figure?
Let’s dive into the cost of cybercrime for the financial sector and what your bank can do about it.
Real-Time Example From a Global Bank
In 2019, Capital One was hacked. The data of more than 100 million customers was accessed after the hacker got through Capital One’s cloud infrastructure.
The Federal Reserve System claims that attacks on these major banks affect “innocent bystander banks” by stopping payments and the flow of funds.
If we think about what your bank does throughout the day, it’s easy to see the importance of cybersecurity in the financial sector. The cost of cybercrime doesn’t just affect you—it impacts each of your customers and their paychecks, mortgages, medical bills, and so forth.
Threats Facing Your Bank
Cybersecurity for the financial sector should be layered and comprehensive. That means investing in the right systems and software but also staying up-to-date on emerging threats.
Banks will never stop worrying about ransomware. With a high rate of human error and malicious threats, ransomware can cripple a banking system and require the bank to compromise their customers’ data or pay up big time.
Mobile banking is increasing every day, but mobile security can be a challenge. Banks need to think of ways to protect customers from malware and phishing attempts.
Compromised Security of Third-Party Suppliers
The average employee uses 36 cloud-based services a day, which leaves many open doors for vendor attacks. Not only do you have to protect your own systems, but you also need to make sure you’re protecting each of your entry points as well.
Cost of Cybercrime on the Day of the Attack
The immediate and obvious costs of a cyberattack include the resources it’ll take to investigate, shut down, restore systems, and take care of any customer compensation you may need to offer. Depending on the size of your business and the extent of the attack, this figure will vary.
However, the financial sector has the second highest average cost per data breach—a number that will only go up the longer you take to recover.
Costs in the First Month
In the first month of a cyberattack, you have to consider customer service costs, legal fees, and network security. Depending on the attack, some of these costs are unavoidable. If you’re breached and don’t take action right away, the long-term damage could be even greater.
Costs in the First Year
In the first year after a cyberattack, you face the costs of rebuilding your brand’s reputation, reestablishing trust with customers, and monitoring credit reports for affected customers. It may also be necessary to implement new security measures and invest in additional training for staff.
The long-term cost of cybercrime can add up quickly and have a serious impact on your bottom line.
The Federal Reserve Bank of New York suggests that a cyberattack on any of the 5 most active banks in the US would affect 38% of the banking network. The financial sector is interconnected and of course, anything that has to do with money plays a major role in the economy at large.
Even if your bank is on the smaller side, a cyberattack can affect not only you but also other banks and organizations that rely on the financial sector. A breach could lead to losses in customer confidence, public trust, and even market positions or investments.
The bottom line? Cybercrime isn’t just costly—it can be devastating. The key is to make sure you’re taking the necessary steps to protect your data and mitigate any risks of a breach before it’s too late.
Take the time now to educate yourself and your team on cybersecurity measures, invest in state-of-the-art technology, and create an incident response plan so you’re prepared for the worst.
With the right preparation, you can protect your bank from a cyberattack and save yourself—and your customers—a lot of money in the long run.
Worried About Protecting Your Bank From Cyber Threats? RESULTS Technology Can Help
Need more help? We’re here to answer all your questions about cybersecurity within the financial sector. As the IT provider for dozens of community banks, our team knows the threats facing your business and how to protect your customers.
Contact us today for more information on our cybersecurity solutions or to set up a free assessment. We’d love to discuss your needs and help you find a solution that fits your budget!