Cybersecurity has become a critical concern for businesses across all sectors, but the financial services industry faces unique challenges due to the sensitive nature of the data it handles and the potential impact of cyber threats.
In a recent speech, Elisabeth Stheeman, External Member of the Financial Policy Committee, highlighted this growing threat and its implications for maintaining financial stability in the UK. In her discussion, she emphasized how the Bank’s Financial Policy Committee is collaborating with other authorities and the private sector to enhance the resilience of the financial system against cyber risks.
In today’s age of 24/7 connectivity, the perception of such incidents can be amplified. If one person who uses another bank cannot access their savings, it may create fear and concern among other people who use different banks, as they may worry about the security of their own savings. This highlights the interconnectedness of the financial services industry and the potential for cyber incidents to impact not only individual institutions but also the overall trust and stability of the sector.
It is crucial for the industry to address not only sophisticated cyber crimes like ransomware but also the less sophisticated ones that continue to pose challenges. This comprehensive approach is necessary to ensure the resilience and security of the financial system, protect the interests of clients, and maintain public confidence in the industry as a whole.
Direct impact on financial stability
A cyber-attack has the potential to directly impact financial stability by causing disruptions in the provision of vital services by financial institutions, markets, and financial market infrastructure. This infrastructure, often referred to as “the plumbing,” is generally unnoticed until it fails. The 2008 financial crisis served as a stark reminder of its importance, as the global finance system faced a serious threat, putting financial stability at risk. It highlighted the need for market participants, policymakers, and the public to recognize the vital role played by this infrastructure and never take it for granted.
Indirect impact on financial stability
Apart from direct disruptions, a cyber-attack can indirectly affect financial stability. This includes financial contagion, which can occur through liquidity stress, financial losses, significant price movements that disrupt market functioning, or a loss of confidence in financial institutions and payment systems.
Building cyber resilience
The financial services industry needs to proactively enhance its cybersecurity measures to combat these challenges. One approach is through effective training and development of cybersecurity skills. Companies like Immersive Labs offer innovative solutions to continuously assess, build, and prove the cyber workforce resilience of organizations.
By utilizing Immersive Labs’ hands-on exercising, organizations can continuously improve their cybersecurity skills, identify areas for enhancement, and strengthen their overall cyber resilience. This approach helps build confidence in teams and their capabilities, as they engage in immersive and technical labs that cover various aspects of cybersecurity, including offensive, defensive, cloud, and application security.
Through hands-on technical training and the use of immersive exercises, organizations can exercise their workforce and identify high-risk groups exposed to cyber threats, such as finance, supply chain, legal, and compliance teams. By arming these teams with labs covering the basics to advanced techniques, organizations can enhance their capabilities and ensure a well-rounded defense against cyber threats.
The Resilience Score and measuring cyber workforce resilience
One notable feature offered by Immersive Labs that can help the financial services industry better understand overall cyber resilience is the Resilience Score. This score is a single value that an organization can use to measure its overall cyber workforce resilience. The algorithm behind the score evaluates multiple factors using performance data from across the platform, providing insights into an organization’s overall cyber resilience, trends, progress, and comparisons to industry and best-in-class benchmarks.
As the financial services industry continues to evolve and become increasingly digital, the challenges posed by cyber threats cannot be ignored. Ransomware and other less-sophisticated forms of cyber crime remain persistent challenges for businesses in this sector. Financial institutions can better protect themselves and safeguard the vital services they provide by recognizing the potential direct and indirect impact on financial stability and leveraging platforms like Immersive Labs to enhance cybersecurity skills and resilience.
To learn more about operationalizing resilience at your financial services organization, read this nine-step guide.
