Banks require aggressive measures to protect their assets and customer information from cyberattacks. Compromised data ranks high on Risk.net’s list of operational risks. Sophisticated technology enables hackers to penetrate systems previously considered safe. In many cases, a cyberattack could prove devastating.
In one of the largest data breaches involving a financial institution, hackers infiltrated a company’s server and accessed more than 100 million credit card applications. The breach exposed the personal information of customers who applied online for credit cards and hackers stole both Social Security and bank account numbers.
Automated robots scour websites seeking vulnerabilities. These may include issues such as weak coding. Once discovered, hackers capitalize on the vulnerability to access client and financial data. The information can then be copied, used or sold. Overall, there are 5 operational risks banks face in the digital realm.
One disruption can affect an entire financial system
The Federal Reserve Bank of New York reports that a small bank experiencing a cyberattack could affect the solvency of larger financial institutions. Because of the interconnectedness of transaction networks, a disruption to a bank’s IT system may create a run on liquidity. Even a temporary shortage of reserves could cause widespread problems across an interconnected financial network.
A lack of resilience could make the damage worse
Resilience refers to the ability to recover and continue operations after a disruption. A proactive strategy could include creating a dedicated resilience team to monitor, detect and analyze the risk of an attack before hackers have a chance to carry one out. If an attack should occur, however, a company’s resilience could help mitigate the resulting harm.
Outsourcing may include third-party risk
Third-party services are popular because of lowered costs and flexibility. A vendor, however, could also introduce security risks. The third-party contractor may have its own vendors and subcontractors. Each new link in the chain could bring an additional element of risk.
Liability could become far-reaching in cases of insider fraud or theft
An individual working within a bank contributed to one of 2018’s most damaging frauds. Organizations could become liable for billions in settlement payouts when an insider hacks, misappropriates or sells client data. The damage can exceed the financial loss. A company’s well-established reputation could take years to repair.
Limited flexibility could hamper liability-protection programs
Liability policies covering IT interruptions or data breaches require flexibility to meet each organization’s needs. Banks could suffer serious damage if left unprepared to deal with or recover from a worst-case scenario. All potential risks and liabilities are worthy of consideration. Insurance agents who understand the variety of offerings and specialty programs can create a customized package to help their clients protect their assets.
Formed in 2013, AmSuisse, Inc. has quickly distinguished itself as a wholesale operation that specializes in working very closely with our agents and broker partners to develop responsive, individualized service for each client. Our unparalleled writing support, industry-specific expertise, marketing support, responsive proposals and quotes, strong customer service, and strong relationships with our carrier partners have all helped us to provide the best possible coverage for our clients. To learn more about our available coverage, contact us today at (855) 912-8697 to speak with one of our representatives.