Financial organizations are adapting to a complex cybersecurity environment as they navigate rapid digitalization and the need for robust data protection measures. Banks, insurance companies, and other financial institutions have access to vast amounts of sensitive customer information, making them prime targets for cyberattacks. Angela Kramer, a senior analyst at RSM’s financial services division, says, “Financial institutions are heavily reliant on digital platforms, and consumers needing to originate a loan for a car or house typically do it through a software program or online.
This amplifies the complexity of cybersecurity threats, and risk leaders need to help mitigate that complexity.
Over the past year, regulators have introduced new rules to elevate cybersecurity standards across the financial sector. The U.S. Federal Trade Commission has amended its Standards for Safeguarding Customer Information, requiring nonbanking financial institutions to report data breaches involving at least 500 consumers within 30 days of discovery.
Financial sector tightens data security.
These regulations will take effect in May 2024. The U.S. Securities and Exchange Commission has also adopted rules requiring all public companies to disclose material cybersecurity incidents and provide annual updates on their cybersecurity risk management and governance strategies. Marlene Dailey, another senior analyst at RSM specializing in the insurance sector, notes that most insurance companies implement technology-focused mitigation strategies alongside policy improvements.
The days of patching up legacy systems are gone; companies are looking to invest in new systems that will protect against cybersecurity threats from a proactive risk mitigation perspective,” she says. To stay ahead of cyber threats, financial institutions are conducting regular cybersecurity risk assessments, honing robust regulatory compliance strategies, and updating processes and procedures as needed. The complex cybersecurity landscape requires financial organizations to remain vigilant and adapt their strategy to protect sensitive customer data and maintain trust in an increasingly digital world.
