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Churn rates in financial institutions: The impact of cybersecurity breaches | AZ Big Media

Global news BCyber todayApril 11, 2020 132

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It’s no longer news that over the years, the financial services sector globally has been the worst hit and the primary target for attacks by cybercriminals. This is due mainly to the fact that cybercriminals can have easy access to funds as well as large volumes of individual information.

A study found out that financial services firms are hit by security incidents an unbelievable . This statistic though revealing is frightening.

It goes a long way to shed light on the high churn rates experienced in the financial sector, the importance, should attach to the causes of successful cyberattacks, and also the ultimate need to keep their knowledge of risk mitigation strategies at red alert.

The effects of data breaches can be very damaging to any business to the extent of even crippling the organization. reports that in 2019, the average cost to businesses affected by a data breach in the United States amounted to $ 8.19 million, up from $7.91 million in the previous year. On the other hand, the was $ 3.92 million.

While this is the case for industries across boards, financial institutions feel the brunt the most. Taking into consideration the , report on the Cost of Data Breach it was discovered that U.S. businesses per record that were lost or stolen in a breach amounted to $225 across all industries, whereas, for businesses in the financial industry the cost was $336.

It’s possible that the reason behind this higher cost may be associated with the specific types of attacks that cybercriminals can use to target financial institutions. It was discovered that a malware attack can cost a financial business around on average

However, when a financial company faces a , which precisely targets its online banking services, the business costs could go as high as $1.8 million. Usually, DDoS attacks are launched with the aim of crippling the bank’s website by inundating it with traffic and taking it offline to halt transactions.

Hackers most often, use this method as a smokescreen to perpetrate other attacks. The overwhelming result is that after these attacks, the financial impact of a loss of brand reputation, loyalty, and trust comes at very high costs across all industries.

There is no wonder then why the customer churn caused by this loss will be a leading contributor to the growth in the increased indirect cost of a data breach. If your company experiences less than 1% churn or attrition of your existing customers, you will be averaging a total cost of a data breach of $5.3 million.

On the other hand, if for any reason you experience churn or attrition that is greater than 4%, the average total cost of a data breach will be expected to hit the $10.1 million mark.

Mitigating cyber breaches

To reduce or totally eliminate churn in a financial institution, your effort should be targeted at mitigating cybersecurity breaches. Fortunately, there are measures that you can apply to ensure this.

The very first thing you do is to insist on zero-trust strategy in your organization. When you believe that everybody can be compromised, you are halfway into checkmating breaches.

You don’t actually require any single technology to effect this but it implies that you must at all times carry out strict identity verification for every person and device trying to access resources within your network. You are not interested in whether the individual or device is inside or outside of the network perimeter.

The next thing you must do is to subscribe to the services of the available. To ensure this you must not cut costs.

A VPN service enables you to alter or ‘spoof’ your IP address to a secure server. With this, you are assured of being more anonymous any time you are online.

Your best VPN may be paid or free but it must essentially have encryption access. This enhances the protection of the confidentiality of your digital data that is stored on your computer systems or transmitted over the internet or any other computer network.

Even if hackers have the opportunity of accessing your data whether stored or in transit, they won’t be able to make any meaning out of it since that will require un-encrypting the data first. Apart from the security benefits of encryption, the adoption is often made mandatory to meet international best practices and compliance regulations.

A large number of organizations and standards bodies do insist or recommend that sensitive data must be encrypted in order to deter unauthorized third parties or threat actors from accessing the data. For example, the Payment Card Industry Data Security Standard () requires merchants to encrypt customers’ payment card data when it is both stored at rest and transmitted across public networks.

To verify that you are subscribing to the best VPN, you should check out these four features:

• Confidentiality – encodes the message’s content.

• Authentication – verifies the origin of a message.

• Integrity – proves the contents of a message have not been changed since it was sent.

• Nonrepudiation – prevents senders from denying they sent the encrypted message.

This content was originally published here.

Written by: BCyber

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