Here is Why NBFCs Need to Focus on Cybersecurity
Unauthorized persons or agencies can gain access to sensitive personal information leading to identity theft and misrepresentation and hence digitisation is the only remedy
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Anything that connects to the internet can and will be hacked as the saying goes, Information technology has greatly advanced in successive years and because of this increasing modernization, the data which were stored previously in physical form is now stored in the form of information in our computers. Global interconnectivity has become prone to many vulnerabilities or risks that can be exploited by criminals competitors terrorists and unauthorized agencies to access organizational resources. For combating the vulnerability caused by such cyber criminals non-banking financial companies need to make their cybersecurity robust. cybersecurity can be described as the utilization of technologies standard practices to protect information systems including data computers software programs and network from attack unauthorized access and modification destruction or theft. Financial sector faces almost three times the cyber attacks as compared to that of other industries.
Role of cybersecurity in national banking finance company is as follows.
⦁ Protection from Malware and Viruses - An ounce of prevention is worth a pound of cure, as the saying goes. In previous years, we have seen many malware and virus attacks which have caused chaos in the whole world, analyzing their history it becomes more certain that these attacks will become more pervasive in near future. Malware and virus attackers use brute force model of infect lock and extort, while some are more sophisticated. Malware and virus attacks generated a lot of cash for criminals, an estimated 1 billion dollar in 2016.
⦁ Protection of confidential files- Knowledge is power and once your knowledge in the form of important data is transferred to someone else, so is your power. Confidential files which our company's assets once leaked is more than a monetary loss because with the help of this knowledge you earned millions. Data leakage is the most costly outcome of a cyber-attack for a company. With data leakage, we are talking about revealing your formula for success. Companies manage records which have confidential information and with the misuse of this sensitive information, it may cause adverse effects on the company which would be irrevocable. Examples of such sensitive information which are stored on network systems are records of finance, employees, physical assets, passwords and access codes. This sensitive information must be secured from the unauthorized modification or access by hackers. Non-banking finance companies are playing a pivotal role in developing the financial system of the country. The banking sector is financing only 40 per cent to the trading sector and rest is coming from the NBFC and private money lenders. Looking at the numbers it is assured that the future of the country is with NBFC and any threat to this sector is a direct threat to the country's development. Non-banking financial companies store personal records of buyers and clients on network systems. A security risk may arise with the breach of security controls, unauthorized persons or agencies can gain access to sensitive personal information leading to identity theft and misrepresentation. Nobody wants to work with a company whose security is not up to international standards and their information are always on a verge to get compromised leading to loss of money and respect. Such a breach of information can pose a big threat to the company as the dissatisfied customer can slap a lawsuit on the company and ultimately this will lead to hefty fines which a company can't afford.
Cybersecurity plays a crucial role in non-banking finance companies as they are most prone to cyber threats and attacks from both internal and external source, Information security controls, policies periodic third-party audits and port active maintenance and educating the users protects the business function of the company and this must be considered throughout the business life cycle. It is recommended for the non-banking finance companies to abide by the IT framework which has been framed by reserve bank of India and NHB for protecting their companies from cyber threats and attacks which is prone to reputational risk and data breach of sensitive information of the customers, financial data loss. In this dynamic world, it is mandatory for the company to be more facile in all fronts which will ultimately lead their company to greater heights and increasing profits.