Cybersecurity 101 for Finance Departments: Vital Policies You Need

Importance of Cybersecurity

For finance teams, the importance of cybersecurity cannot be overstated. The digital age has brought numerous benefits but also significant risks. Understanding the impact of cyberattacks and the financial losses they can cause is crucial for developing effective cybersecurity policies for finance departments.

Impact of Cyberattacks

Cyberattacks have far-reaching consequences that can affect every aspect of a company’s operations. Finance teams are particularly vulnerable due to the sensitive and highly regulated data they handle. Cybercriminals often target financial services firms because they are 300 times more likely to be attacked than any other industry. One notable example is the manipulation of the SWIFT wire transfer system in 2016, which resulted in an $81 million theft from the New York Federal Reserve Bank (Security Intelligence). Such incidents underscore the critical need for robust cybersecurity measures within finance departments.

Year	Cybercrime Cost (Trillions)
2015	$3
2025 (estimated)	$10.5

Financial Losses

The financial impact of cyberattacks is staggering. According to the White House Council of Economic Advisors, the United States economy lost between $57 billion and $109 billion due to cyberattacks in 2016 alone. Globally, companies are expected to incur an annual cost of $10.5 trillion due to cybercrime by 2025, a substantial increase from $3 trillion in 2015. For finance departments, the cost of a data breach is particularly high. In 2022, the average cost of a data breach in the financial industry worldwide was nearly $6 million (Field Effect). IBM and the Ponemon Institute reported that the average cost of a data breach in the financial sector in 2021 was $5.72 million. These figures highlight the urgent need for finance teams to implement and maintain strong cybersecurity measures.

Year	Average Cost of Data Breach (Millions)
2021	$5.72
2022	$6

For more insights on the cyber threats in the finance industry and how to safeguard against them, it is essential to continually educate and train your team. Explore our resources on cybersecurity training for finance professionals and the importance of cybersecurity awareness. By understanding the impact of cyberattacks and the potential financial losses, finance teams can better appreciate the importance of developing and adhering to comprehensive cybersecurity policies. This knowledge empowers them to take proactive steps in protecting their organisation from cyber threats.

Cybersecurity Policies for Finance Teams

Policy Development

Creating robust cybersecurity policies is essential for finance teams to safeguard sensitive financial data. Cybersecurity policies outline the rules for how your team, third parties, partners, and customers can use and access your organisation’s IT resources and data. Start by identifying the key areas that need protection, such as financial records, client information, and internal communications. Involve stakeholders from different departments to ensure comprehensive coverage. Your policies should address the following:

• Data Access: Who has access to what data and under what circumstances.
• Password Security: Guidelines for creating and maintaining strong passwords. For more details, check out finance team password security.
• Incident Response: Steps to take in case of a data breach or cyberattack.
• Regular Training: Ensure your team is well-versed in cybersecurity best practices. Refer to cybersecurity training for finance professionals.

Regular Reviews

Regular policy reviews and updates are crucial for maintaining an effective cybersecurity posture. Organisations should not wait for an external deadline or an incident to review and update their policies (Infosec Institute). Schedule regular reviews—quarterly or bi-annually—to ensure your policies remain relevant and effective. During these reviews, consider any new threats, changes in technology, or feedback from staff about the current policies. This proactive approach can help you stay ahead of potential cyber threats.

Review Frequency	Key Activities
Quarterly	Assess new threats, update policies, gather feedback
Bi-Annually	Comprehensive review, train staff on updates, audit compliance

Changes in policies can also be made after a threat or incident occurs, documenting what happened, lessons learned, and how existing policies either succeeded or failed. This iterative process ensures continuous improvement in your cybersecurity measures. For a deeper dive into cybersecurity responsibilities, visit our page on finance team cybersecurity responsibilities. Additionally, learn about conducting regular cybersecurity audits for finance teams to ensure compliance and effectiveness.

Common Cyber Threats in Finance

In the financial sector, cybersecurity is paramount. Your finance department must be vigilant about common cyber threats that can disrupt operations and lead to significant financial losses. Two of the most prevalent threats are phishing attacks and Business Email Compromise (BEC).

Phishing Attacks

Phishing attacks are widespread and rely on psychological manipulation and the exploitation of human vulnerabilities to achieve their objectives. A phishing attack typically involves an attacker masquerading as a trustworthy entity to trick recipients into revealing sensitive information such as login credentials or financial details. In the financial sector, phishing attacks increased by 22% in the first six months of 2021 compared to the same period in 2020. This alarming trend highlights the need for robust cybersecurity policies for finance departments.

Year	Phishing Attack Increase (%)
2020	–
2021	22

Stealing just one employee’s credentials gives attackers a stepping stone into your company systems. Therefore, training your team to recognise and respond to phishing attempts is crucial. For more information on this, visit our article on cybersecurity training for finance professionals.

Business Email Compromise (BEC)

Business Email Compromise (BEC) attacks can lead to significant financial losses and compromised data. These attacks involve cybercriminals gaining access to a business email account and then using it to trick employees, customers, or partners into transferring money or sensitive information. The FBI reports that BEC scams alone have cost global victims more than $50 billion since 2013 (Field Effect). This makes BEC one of the most financially damaging online crimes.

Year	Global Loss from BEC (USD)
2013 – Present	$50 Billion

To counteract BEC threats, finance teams should implement strict finance team password security protocols and regularly update them. Additionally, two-factor authentication (2FA) should be mandatory for accessing sensitive systems and data. For more tips, check out our guide on finance team cybersecurity responsibilities. Understanding these common cyber threats and implementing strong cybersecurity measures can protect your finance department from potential attacks. Stay informed and proactive by keeping up with the latest trends and best practices in cybersecurity. For regular updates and more resources, visit our section on cyber threats in finance industry.

Compliance and Regulations

GDPR Compliance

The European General Data Protection Regulation (EU-GDPR) is a crucial security framework designed to protect the personal data of EU citizens. This regulation applies to any business that processes data related to EU citizens, regardless of the company’s physical location. As part of your finance team cybersecurity responsibilities, ensuring compliance with GDPR is essential. Non-compliance with GDPR can result in hefty fines. The penalties can reach up to €20 million or 4% of your annual turnover, whichever is larger. This highlights the importance of adhering to the regulation to avoid financial losses and reputational damage.

GDPR Compliance	Penalty for Non-Compliance
Up to €20 million or 4% of annual turnover	Whichever is larger

It’s important for your finance team to understand the requirements of GDPR and implement necessary measures to ensure compliance. Regular cybersecurity audits for finance teams can help identify any gaps in compliance and address them promptly.

Payment Card Industry Data Security Standard (PCI DSS)

The Payment Card Industry Data Security Standard (PCI DSS) is another critical set of standards aimed at reducing credit card fraud and protecting the personal details of cardholders. Compliance with PCI DSS is mandatory for organisations that process customer credit card information (UpGuard). Non-compliance with PCI DSS can lead to severe financial penalties, ranging from $5,000 to $100,000 per month. These fines can accumulate quickly, making it imperative for finance teams to adhere to PCI DSS requirements.

PCI DSS Compliance	Penalty for Non-Compliance
$5,000 to $100,000 per month	Per month

To ensure compliance, your finance team should implement robust cybersecurity measures, conduct regular cybersecurity training for finance professionals, and stay updated on the latest PCI DSS requirements. This proactive approach can help protect your organisation from financial penalties and safeguard sensitive credit card information. Understanding and complying with these regulations is essential for maintaining the security and integrity of your financial operations. For more information on cybersecurity regulations for finance teams, visit our dedicated section.