Ask the Expert: How is cybersecurity changing finance?
The internet has exposed us to an array of luxuries previously which were seen as something unattainable. However, with its many benefits came the daunting realization of its negative perspective. One such contributing factor which has caused more harm than good is the cybersecurity sector, being exposed to millions of threats on a near hourly basis. Cybersecurity serves as the brick wall between our important information and total and utter chaos. Cybersecurity acts as a barrier between us and potential vulnerabilities in the system which can be exploited in more ways than just one. The growing demand for cybersecurity has fuelled the development of cybersecurity markets in the past few years and is estimated to reach 170 billion in the next two years as reckoned by Forbes.
While investment in cybersecurity is reaching an all-time high, other measures such as bring your own device or BYOD are being implemented to cover up any vulnerabilities. With that said, it comes as a shock to none that cyber threats still prevail. The cause behind the failure of eradicating such a nuisance is none other than the adversity the threats come in. ranging from malware to ransomware and everything in between, our systems have never been safer yet more under threat of exploitation. Cyber threats take on many forms and one such form is of cybercrime. More often than not, financial service sectors are the bearer of losses when companies fall victim to cybercrimes. With the financial sector suffering more and more losses, the breach rate in the sector has grown thrice as much in the past five years according to a report from Accenture and the Ponemon Institute. The in-depth analysis of the report primarily focuses on the cost incurred by the companies who fall prey to such vulnerabilities. A costing methodology is set in place which estimates and calculates the range of costs incurred when combating a cyberthreat.
The Severity of Compromise
What’s more, is the Panama Papers report shed light on the drastic increase by over 40% in crime rate cost in the financial institution sector over the last three years. With due reason, any form of compromise in the finance sector or in the finance sector of the firm can call havoc and turmoil. As even a minor breach in the financial sector and cause identity theft, the leak of sensitive data and numerous lawsuits. Adding insult to injury, public shaming and loss of credibly come easily to those institutes who have fallen prey to such a circumstance. Electronic transaction and e-banking or more famously known as online banking is a key domain, which upon compromise, can cause catastrophic outcomes. Primarily, the cost of combat is drastically increased every time a cyber attack strikes. With the cost of compromise being US$12.97 million per firm, four years from now, it rose to a staggering US$18.28 million in the last year. The increase in costs can be justified by the increase in breaches companies have faced over the years, with 2012 having roughly 40 breaches to 2017 having 125 breaches. Moreover, 87% of the total cost is accounted for by data and information loss alone, adding to the severity of cybercrimes.
Furthermore, practices are being implemented in regulating volume variety velocity veracity of data as much as possible. Therefore, big data received or accumulated by the financial sector is regulated by PCI-DSS regulations or the U.S. Patriot Act. While the enormity of big data makes it the ideal pool of information to find hidden markets in, its temptation eludes no one. Hence, cybercriminals also channel through big data to find holes in the system which can be exploited. In situations like these surfaces the struggle of finding the perfect balance the demand for securing big data and exposing it to as little risk as possible and maximizing returns while managing the enormous data cluster. All while, addressing and abiding by security regulations and privacy regulation laid forth by the international market. Big data, in the right hands, can be used for the betterment of society and if fallen into the wrong hands can cause tremendous damage, such as the case of “Eurograbber”. A cyber attack costing 36 million euros worth of damage by exploiting big data to fuel potential loopholes in the system.
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