Fintech industry: 7 reasons to invest in cybersecurity
Within the financial world, we are witnessing a significant push towards the digitization of services, largely thanks to fintech. And precisely in this scenario, cybersecurity emerges as one of the primary concerns in the sector. The reason? The potential impact of a security breach on our data or systems is a concern we cannot ignore.
Following this same line of thought, the Bank of Mexico has established three types of damage that could arise from a cyberattack:
- Disruptions in systems and service availability.
- Impact on the integrity, availability, and confidentiality of the data held by institutions, including sensitive customer information.
- Economic losses for both the institution and its customers.
Hence, the importance of strengthening cybersecurity in areas such as loan applications, where having precise customer information is essential to prevent situations of non-compliance, for example.
Clear numbers and data on why it's worth investing
Now, let's look at some cybersecurity figures in Finance that demonstrate why it's worth investing:
- According to the latest annual Cost of a Data Breach Report by IBM, the average cost of a cyberattack in the financial industry was $4 million in 2022.
- 73% of companies in the Latin American financial sector have fallen victim to some form of cyberattack. Many experts warn that the impact of cyber risk is underestimated.
- More than 86% of financial sector companies in the region believe that malware attacks (including ransomware) will increase in the coming years.
The economic benefits of investing in cybersecurity for financial companies
So let's imagine a scenario in which financial companies underestimate the importance of investing in cybersecurity. What would be the economic consequences of such a decision?
Here are the financial benefits of taking adequate protective measures:
1. Building trust and customer loyalty Prioritizing cybersecurity helps build and maintain trust in the financial sector. By safeguarding customer data and preventing cyberattacks, financial companies can foster lasting trust with their clients. This trust not only retains existing customers but also attracts new ones, leading to steady account growth and increased revenue.
2. Efficient resource allocation Investing in cybersecurity upfront can save financial companies substantial amounts of money in the long run. By proactively addressing security measures, they can avoid the high recovery costs associated with data breaches and cyberattacks. This allows them to allocate their resources more efficiently and effectively.
3. Compliance and reputation enhancement Strong cybersecurity measures not only protect against breaches but also ensure compliance with regulatory standards. By adhering to these standards, financial companies not only avoid fines but also enhance their reputation in the industry. This positive reputation can lead to increased trust among customers and stakeholders, ultimately boosting financial stability.
4. Uninterrupted services Robust cybersecurity safeguards financial systems and services from disruptions caused by cyberattacks. Ensuring uninterrupted service delivery leads to higher customer satisfaction and retention rates. It also preserves revenue streams and opens up opportunities for continued growth.
5. Preserving brand reputation A well-handled cybersecurity incident, backed by a comprehensive response plan, can actually enhance a company's brand reputation. Transparency, accountability, and a commitment to customer security can demonstrate the company's dedication to protecting its clients, reinforcing its image in the market.
6. Risk mitigation and legal preparedness Investing in cybersecurity not only reduces the risk of data breaches but also prepares financial companies for potential legal challenges. By having strong security measures and incident response plans in place, they can minimize legal risks and potential costly litigation.
7. Enabling innovation and growth By ensuring the safety and security of customer data, financial companies can focus on innovation and growth initiatives. Without the constant need to address security breaches, they have the freedom and resources to explore new opportunities and drive economic growth.
In summary, not investing in cybersecurity in financial companies can have a negative economic impact. The financial consequences are significant and can jeopardize the stability, reputation, and long-term success of the company.
We must understand that investing in cybersecurity is not merely a precautionary measure but a vital strategy to ensure financial health and secure the organization's future in an increasingly interconnected digital world.