Today’s tech world relies heavily on cybersecurity, and corporate finance is no different. Without adequate security, corporate financial information and bank accounts would be exposed to the actions of cybercriminals and other malicious actors.
Leslie Haoen Shen, a senior finance executive from Toronto, Ontario, explains why cybersecurity is so important in corporate finance and how it affects the corporate world as a whole.
What is Cybersecurity?
Cybersecurity is the practice of protecting sensitive data, devices and computer networks from intrusion. It is specifically intended to ward off criminals and protect the privacy of people whose data is stored in the system.
Today’s world runs largely on computers, and cybersecurity is paramount in every industry. From transportation to communications and finance, every industry must apply cybersecurity principles to their proprietary information.
The risks of not maintaining adequate cybersecurity
The risks of poor cybersecurity can be considerable. Companies can lose their reputation. They can lose customers. They can lose money. Their business operations may be disrupted.
Canadian businesses are losing significant amounts of money and operational freedom due to poor cybersecurity. According to StatCan, one-fifth of Canadian businesses say they were affected by cybersecurity incidents in 2019. ten percent of businesses lost revenue and 6% said the breach damaged their business reputation. More than half of all companies affected said their employees were prevented from carrying out their daily tasks.
Without adequate cybersecurity, Leslie Haoen Shen warns, businesses are vulnerable to malware attacks that could wipe out entire systems, hackers who break in and modify important files, and attackers who weaponize computers to damage people. other businesses and individuals. Attackers can also take advantage of proprietary financial information to steal money or secrets.
Corporate Finance Cybersecurity Threats
Cybersecurity threats can come from a variety of sources, from small operations by individuals to attacks by nation states. Individuals may be tempted to steal data because they can resell it. Organized crime networks may believe that cybercrime is a low-risk way to make money on the black market. Competing companies may look for any way to gain an advantage in negotiations and might find ways to provide a better deal to customers.
Nation states may have an interest in destabilizing financial systems by attacking their financial base. They may want to protect their own company’s advantage in areas of strategic importance.
Hacktivists may be motivated by a sense of moral or political opposition to a target company. These hackers could sabotage a business to prevent it from achieving its goals.
Finally, the information may be used by current employees or contractors. They may be looking to make a quick buck, or they may be unhappy with their job and looking for a way to get revenge on their employer. It could also be factories set up by competitors specifically to obtain sensitive information from their real employers.
Information that must be protected
Corporate finance professionals need to protect huge volumes of data from cybercriminals and other malicious actors. Corporate financial transactions provide a rich source of salable information and data to cybercriminals, and the vulnerabilities can seem endless.
Some examples of the types of information that corporate finance must secure are the intellectual property of companies that are about to be sold, the financial data of companies that participate in financial transactions, and contracts between companies and financial institutions that serve their banking and credit needs.
Most cybersecurity experts believe that financial transactions are one of the most vulnerable types of information. Any systems that can protect transactions are highly valued.
Methods of hackers to steal data
One of the most popular ways for a hacker to gain access to a sensitive computer system is to use a “a phishing attack. In a phishing attack, emails mimic legitimate messages and encourage unsuspecting employees to click on links. These links can lead them to pages that provide information or passwords. This makes it easy for hackers to gain access to protected systems.
Malware is another method used by cybercriminals to steal data. It involves downloading a package of dangerous code onto a vulnerable computer. Malware can be disguised as a useful application or a tempting game.
Ransomware has become another common way to steal data. This software takes a computer hostage and demands money, usually in cryptocurrency, before the computer system is unlocked.
Methods of protecting company financial information
Fortunately, cybercrime protection experts have plenty in their toolkits to prevent damage to systems and business reputations. Here are some examples:
firewall
Firewalls are one of the main methods with which experts protect computer systems. Firewalls are network security devices capable of monitoring traffic. They block data according to certain security requirements. They establish barriers between a company’s network and the Internet or other external sources.
Keep systems up to date
Old virus definitions or malware warnings can open up opportunities for cybercriminals. Cybercriminals frequently exploit this type of weakness in computer systems.
employee training
Malware, phishing, and ransomware are often allowed onto sensitive computer systems by unknowing employees. Employees at all levels must be trained to recognize these attempts and refrain from falling into the trap of cybercriminals.
Treatment of vulnerabilities
Corporate finance professionals need to be aware of the high likelihood of cybercrime that could expose their sensitive data and cause their business to lose reputation and customers. Leslie Haoen Shen wants all corporate finance professionals to understand that they must follow security procedures and ensure that their IT and cybersecurity staff are properly trained, as well as their core employees.
This article does not necessarily reflect the views of the editors or management of EconoTimes
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