The financial services industry faces a greater risk of a data breach than ever before. Greater connectivity with third-party vendors and software has expanded the attack surface, exposing financial institutions to unprecedented cybersecurity and data privacy non-compliance risk.
To put it simply, when you allow other companies to access your sensitive data and company resources, their vulnerabilities become your vulnerabilities. This is a big challenge for financial services organizations, which have always been prime targets for cybercriminals. Today, malicious actors and nation-states are eager to exploit third-party vulnerabilities in order to access financial organizations’ internal networks and data.
The Cost of Unmitigated Risk is Rising
Unresolved vulnerabilities, weak security processes, inadequate security leadership, and poor data governance within third parties can lead to catastrophic consequences for financial organizations, such as banks, insurance companies, fintech providers, and payment processing services.
In 2022, the average cost of a data breach in the financial industry was nearly $6 million, up from $5.7 million in 2021. Other associated costs — such as operational downtime — can drive up costs significantly. In the banking and finance sector, just one hour of downtime can cost as much as $9.3 million.
On top of that, financial services organizations are subject to a long list of data privacy and protection regulations. Compliance failures, which are often exposed in the wake of a breach, can quickly add up.
For example, financial services organizations will be subject to a $100,000 fine for each violation of GLBA, plus up to 1% of the company’s assets. Penalties for violating BSA can range from $10,000 to $1 million. Failure to comply with general data privacy laws, such as GDPR, can cost up to €20 million or 4% of an organization’s global annual turnover.
Bookmark This Checklist When Evaluating Vendor Security Posture
Thankfully, it’s not all doom and gloom for financial services organizations. With comprehensive and continuous monitoring of your vendors’ cyber posture, you can maximize the efficiency-enabling and cost-savings benefits of third-party systems while keeping your networks and data secure and minimizing third-party risk.
Specifically designed to address the security challenges, compliance needs and priorities of the financial sector, this 10-point checklist will help you evaluate vendors’ security posture — and give you the insight required to minimize third-party security risk.
Whether you’re considering purchasing new software or service, or you have identified a need to reassess your current third-party relationships, this checklist will be a game-changer. Download the checklist now to get started on evaluating your third parties.