Cybersecurity: The Cost of Cybercrimes In The Financial Industries

1.0 Background

Litany of breaches and damages that happens through online platforms continues to grow. This situation has been contributed to by the advancement of technology and accessibility of computers that are cheap. Despite the fact that improvement in technology has significantly contributed to the improvement of services, it is disturbing to find out that online aggressors are in proliferated moves to interrupt the seamless flow of information.Shanmugan (2013) defines cybersecurity as the collection of processes and structures, that aims to protect the cyberspace. Based on the definition, the experts trained in cybersecurity aggressively checks the information exchanges in the online platforms. Narrowing down to the organizational level, the IT department, equipped with trained professionals ensures that the company’s data is subject to scrutiny, and eliminate any form of intrusion, that might derail the performance or halt operations.

The problem of securing information online is more acute, attributed to by complexity and more knowledge concerning the modern technology. It is a big challenge affecting the private sector, government and individuals, who have been looking for ways through which toy can mitigate this menace. However, despite the proliferated efforts by various bodies to abate the hackers, the danger of cyber insecurity has threated even the perceived supper nations such as the United State. Cyber threat challenges the national security and subsequently affecting the economy negatively. For example, in the year 2016, about 4 billion records were stolen and it is estimated that the online threats costs the U.S government close to $57 billion per year (Nikolova ,2017).

The cascading effect of cybersecurity streams from the leakage of individual data, intrusion of financial organization and even large government corporations. The inherent fragility of the networks used in the various sectors, predisposes the enterprises into this risk. Although there have been efforts to educate the employees and other stakeholders on the need to evaluate any source of data, the problem has become difficult to solve. This is because technology is not static, and quite often, more advances are being unveiled. This makes it a wicked problem, thus need to look on this issue on an in-depth manner; probably through imposing stricter regulative policies.

2.0 Aim

The aim of this paper is to explore the wider topic of cybersecurity. The issue becomes the center of focus, because in the present times, organizations have complained of leakage of the confidential data, that is used by competitors to survive in the complex market.  Also, the most targeted companies are those that deal with finance. According to Accenture (2018), the cost of cybercrimes in the financial industries has increased by 40% for the past three years. In the year 2017, the figure stood at US$18.28 million per firm, which impedes the growth of this sector. Therefore, the paper aims to review the secondary sources regarding this issue, and offer recommendations in probable strategies that can be adopted to remediate the problem.

3.0 The Scope

The extent of this research will primarily discuss the importance of the cyberseucty to organizations and personal data. As the topic is wide, secondary sources of data will be consulted, and no field work that will be conducted. The thoughts of authors who have conducted studies in similar topics will be critiqued and extrapolated to get a deeper understanding.

4.0 The Wicked Problem-Cybersecurity

Over the years, the realm of technology has improved at an alarming rate. Similarly, the organizations have embraced the use of IT, in making the work easier hence improving the productivity. However, this move comes along with the requirements to fasten the security of the data. This is the loop hole that the online enemies have taken charge of, to disable the operations of the various industries. The following paragraphs will discuss some of the industries affected by the issues of cybersecurity, and the nature if crimes that are specifically targeted to their websites.

4.1 Health sector

The use of technology in the healthcare facilities is a modern strategy, that has revolutionized the way services are offered. In the hospitals, the most valuable and widely used technology is internet of Things(IoT). It is useful in documenting the patients’ medical histories, demographic and billing information (Whyte &Mazanec,2018). The data is exchanged and shared among all the departments in the hospital, in such a way that whenever a patient is sent to a particular office, they don’t need to carry the hardcopy. This trend has improved the quality of services, through lessening the time taken to attend to the patients. Despite this new move, it is accompanied by cyber threats.

One is impersonation, that is defined by Tsuchiya (2016), as the tendency to alter information to appear as the real person. The attacker changes the data recorded in the system, to appear the way they want, which can result to wrong treatment. In the same vein, message modification is another challenge that faces the IoT system. The online aggressor receives the information, first, and then modify and later resends to the anticipated receiver. Similarly, man-in the middle is a form of cyber insecurity, where information from the sender and receiver can be modified and content changed, to serve the attacker’s interest. All of these lowers the quality of services offered in the hospitals, and have continually harmed the patients.

4.2 Financial Sector

Financial sector is one of the instrumental and delicate area in any economy. Interrupting this sector has an effect of derailing the economic growth, because the people could lose a lot of money. According to Thomas (2013) the instances of cybercrime started with financial companies, before translating to other areas. the attackers target to divert the payments, or even withdraw the monies to their accounts, without the knowledge of the regulators. This has been a rising issue all over the world, and companies such as banks are hit more than any other. According to Nikolova (2017) banks lost $16.8 billion in the year 2017, which contributed to them losing revenues which could have been used for growth. Also, the loyalty from the customers lowered, as most of them did not trust the banks with their monies. As a move to abate the wrath of the cyber attackers, banks came up with a strategy to review the online activities from within and outside, but this has not offered remedy. More sophisticated technologies are coming up, which compels the IT experts in these organization to continually update themselves. The cost of training the staff often, is perceived as a cost, especially in the developing countries, which leaves the financial sector prone to losing money to anonymous people.

4.3 Cybercrime targeted to individuals.

Shanmugam (2013) noted that the period when people though the online aggressors only targeted the institutions has elapsed, and the problem shifted to individuals. More than before, people are feeling insecure to share information through the online platforms, as the chances of their information leaking I stood high. For example, if the billing card information is accessed by another party, it could result to losing of the money. People are more vulnerable to the cyber-attacks, as they have no means to protect themselves, apart from the preventive measure which do not guarantee full security. Likewise, the effect on the social media is by far affecting the individual’s portfolio. For instance, impersonation on the Facebook can lead to tainting the image of the celebrity, a phenomenon that would significantly lower their command in their industry.

5. 0 Policies Launched to Support Cybersecurity

In order to mitigate the impacts of cyber insecurity, various states have come up with strategies that works to favor the private and the government sector (Bailetti&Zijdemans ,2014). One of such areas is extending the legislation involving combating the fraud on non-cash mode of payments. This is a requirements put forward by regulatory bodies in the financial sector, where any form of payment executed vial online platforms should undergo thorough scrutiny before being forwarded to the recipient. In the recent study conducted by Thomas (2013) he noted that the increase of online payment methods prompts the sellers or buyers to share pertinent information, hence the companies dealing with non-cash payment required to beef the security of the clients.

Furthermore, a directive to strengthen the cybercrime laws and tougher criminal sanctions was corporately introduced in all states, which required substantive actions taken against those found trying to intrude into other people’s data (Persadha et al. ,2015). The move was adopted to try abate the tendencies of aggressors prompting to extract confidential information, and whenever identified, punitive measures to be taken against them.

6.0 Evidence that the policy has succeeded/ Not succeeded

What’s more, the case of data leakage continues to feature in popular medias. One of the recent cases that was revealed recently was the allegation of Facebook, to controlling the election in the U.S. the research revealed that Facebooks pitched individuals account to defame a candidate, who was much supported by the populace. The campaign yielded result by disposing of wrong information, which has significant negative effects after revelation. Similarly, research conducted by Nikolova (2017) indicated that there was rampant data leakage in the year 2018, with about 340 million records exposed on publicly exposed servers. The incident left people and organizations vulnerable to attackers. Despite there being the policies to protect the online users, more complex technologies continue to emerge, and the attackers go ahead of the institutions in learning these technologies (Ablon ,2018). This is what make it difficult to control the cybercrime.

7.0 Unintended Consequences

The following paragraphs will discuss some of the direct impacts, that come along with cybercrime. Mostly, the institutions are affected hence the need to understand the implications, in order to form workable strategies to curb the challenge.

Organizations such as banks are always at the receiving end when it comes to cyber insecurity. They are targeted through diversion of funds secretly, which is realized during the auditing period. As hacking is a silent theft, some of funds are lost and takes long before realization (Thomas ,2013). Similarly, the customers are targeted when making payments using cards or any other online billing system. As the financial sector has tried to reduce the problem, the customers are the ones left in despair, since they might fail to recognize malicious requests from the attackers.

In the same vein, lack of proper cyber security in the organizations might results to unemployment (Eriksson &Giacomello ,2006). This comes in the form that diversion of funds might lower the growth of a company, which can lead to reduced growth rate. Inability to handle the storms from the attacker has a high probability of reducing the chances of improvement that heightens the solvency.

8.0 Conclusion

Cybersecurity costs the organization extra money, trying to safeguard their data. however, this has not been easy contributed to by the ever changing technological environment. The intrusion of data by hackers happens in different sectors such as health, financial industry and individualized accounts. Thus, the phenomenon is a global catastrophe that requires international intervention. The policies have been launched to mitigate the impacts of cybercrime, but the complex technology make it difficult to fight the menace.

9.0 Recommendation

  • Continued improvement of skills for the expert in IT department in the various organizations.
  • Educating the public on the possible sources of cyberattacks and how to deal with them.
  • Stiffening the policies dealing with cyber security.

10.0 References

Ablon,T.(2018). Data thieves. The motivation of cyber threats actors and their use and monetization of stolen data.

Bailetti, T., &Zijdemans, E. (2014). Cybersecurity startups: The Importance of early and rapid Globalization. Technology Innovation Management Review, 4(11), 14-21.

Eriksson, J., &Giacomello, G. (2006). The Information Revolution, Security, and International Relations: (IR)relevant Theory? International Political Science Review27(3), 221-244.

Nikolova, I. (2017). Best practice for cybersecurity capacity building in bulgaria’s public sector. Information & Security: An International Journal, 38, 79-92.

Persadha, P., Waskita, A., &Yazid, S. (2015). Comparative study of cyber security policies among Malaysia, Australia, Indonesia: A Responsibility Perspective. 2015 Fourth International Conference on Cyber Security, Cyber Warfare, and Digital Forensic (CyberSec).

Shanmugam, R. (2013). Hacking-vigilance distribution with application to assess cyber insecurity level. International Journal of Information and Education Technology, 300-303.

Thomas,R.N.(2013). Securing cyberspace through public-private partnership. A comparative analysis of partnership models.

Tsuchiya, M. (2016). Cyber security of financial sectors in Japan, South Korea and China. Managing Cyber Risk in the Financial Sector, 96-111.

Whyte, C., &Mazanec, B. M. (2018). The technological foundations of insecurity in the digital age. Understanding Cyber Warfare, 10-35.

Accenture (2018).Cybercrime costs financial-services sector more than any other industry, with breach rate tripling over past five years, according to report from accenture and ponemon institute.

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