Cyber risks make up an unprecedented global phenomenon expecting to cost the world 10.5 trillion annually by 2025. Businesses, utilities, financial services and governments are highly susceptible to cybercriminal threats because so much data is available everywhere. As a result, businesses of all sizes are experiencing disruption in operations, massive financial losses, reputational damages and declining growth rates.
Compliance is essential to build trust and reliability and let customers know they are in a good company. Cybersecurity compliance is, however, not easy to satisfy, given the unforeseen and ever-increasing threat landscape around cyber crimes. While a predictive-analytics-based solution with the capability to consume rich data helps meet compliance needs for cyber risks, businesses can further develop resilience into their cybersecurity programs to prepare for future risks and mitigate them at scale.
Top Potential Cyber Risks for Businesses
According to WEF Global Risks Report 2023, widespread cybercrime or cyber insecurity is among the top 10 global risks. As per FBI reports, US businesses experienced 26,074 cyber incidents, resulting in $2.6 billion of losses in damage in 2021. Unfortunately, insurance companies set a standard to cover the cyber risk damage. So, not all cyber attacks are covered under the insurance program.
Additionally, cyber risks impact operations, and restoration is likely once a heavy amount of ransom is paid. Statistica also reported that cyber-attacks caused 4% of U.S., businesses to lose more than a million dollars in 2022.
What is concerning is the huge impact of cybercrimes on small and medium-sized businesses. Cyber risks cost them $2.2 million a year. What is more, 60% of businesses cannot bounce back within six months of an attack.
Challenges for Businesses When Controlling Cyber Risks
Businesses grapple with unexpected scenarios that make cybersecurity challenging for them. These scenarios can include the following:
- Remote work puts company data (employees, customers, and business) at stake
- Businesses abstain from disclosing cyber attacks out of the fear of reputation damage
- Bad actors, such as ransomware-as-a-service, synthetic bots, malware, trojans, IoT-based attacks, have become more sophisticated.
- IoT-driven smart cities, supply chain and the spur of digital tools expose data at scale
- Interconnected global risks, including rising prices, energy and food shortages, and climate change limit the ability of many businesses to invest in cyber resilience programs
Staying compliant with data laws can be effective for your business to implement a resilience strategy to better prepare for cyber threats and take actions to mitigate the risks.
The Best Resilience Approach to Mitigating Cyber Risks
Prioritizing compliance means you are better at keeping pace with government laws, improving customer experience and expediting customer retention and business growth. Additionally, you continuously make an effort to intensify your CIP or customer identity program for KYC validation.
1. Build a Sound Compliance Program
Attempting to protect all data points of your customer identity program may lead to essential data slipping through the cracks. Increase your focus on cyber risk assessment based on the changes to the regulatory environment. Data analytics here can play a vital role in ensuring you prioritize specific issues with your cyber security needs. Your customer identity program that is supported by a tool built on fraud analytics can acts as a powerful tool to help you harness data and further analyze room for improvement.
2. Prevent Supply Chain Threat
Your supply chain can be as intimidating as other growing cyber risks. Primarily, businesses across financial services need stringent KYC programs, such as Instnt Access™, the first portable KYC solution, to prevent non-compliance fines. With Instnt Access™, businesses no longer need to trade off customer experience with their security, risk, and compliance requirements.
In an attempt to make KYC processes fool-proof, many businesses end up shoring up point solution vendors. These dispersed solutions may expose critical data to cyber criminals and cause massive financial losses, requiring businesses to review supply chain threats to ensure data security. Yet, it is not easy to maintain ongoing monitoring for compliance across these vendors. A fully managed customer acceptance platform like Instnt removes these bottlenecks and prevents the risk of false positives while diligently maintaining KYC compliance.
3. Continuous Cyber Risk Assessment and Monitoring with Data Analytics
Synthetic bot attacks or attacks launched by ransom-as-a-service are increasingly sophisticated. Businesses today need to maintain ongoing fraud risk assessment on their platforms. Unfortunately, businesses that have KYC verification solutions widely use rule-based mechanisms. The issue with rule-based solutions is that they can only detect known threats and are unable to scale when the threat pattern is unknown.
An advanced KYC verification tool that leverages a predictive analytics model for customer onboarding flow can apply machine learning to detect unusual user behavior or anomalies and flag the risk instantly. This capability enables the tool to adapt to the new threat pattern and apply defensive mechanisms over time without needing to manually ingest data into the system.
By leveraging a fraud detection and KYC verification platform from Instnt, businesses can prevent risk in real time. Inside the Instnt dashboard, when you allow checkable KYC steps to work for identity validation, the platform rejects transactions if any of the KYC details do not match. This gives businesses a better approach to reviewing risk profiles and flagging them, thereby satisfying compliance and avoiding risking financial damage to the consumer and your business.
4. Abstain from data control
Cyberattacks occur when you let loose data by storing them in a centralized data storage architecture. There is ample evidence that links cyber risk due to threats to centralized data. Amidst the escalating cyber attacks and stringent compliance rules, voluntary disposal of data can help prevent cyber risks. Businesses are also reevaluating this option as this approach frees them from dealing with user data and the need to store it.
For your KYC verification program, if you leverage a self-sovereign identity management solution, you can prevent the risk of data exposure to cyber criminals and offer your users the ability to revoke their credentials as and when they wish.
Instnt Access™ allows businesses to employ a decentralized verifiable credential solution for their KYC and fraud detection initiatives. By deploying a no-code platform inside your signup flow, you instantly enable users to obtain all of their personal information inside a decentralized white-labeled wallet, making it easier for them to scan a QR quote on signup pages 一 no matter the platform and authenticate their credentials. By using the Hyperledger blockchain technology, Instnt Access™ removes customer onboarding friction and gives users total control of their data.
Reduce Cyber and Operational Risk with Instnt
Due to today’s massive exchange of data, it is essential to build an effective resilience strategy for data compliance and security. Instnt understands the pain businesses are experiencing today. With its fully-managed and integrated AI-powered KYC verification platform, Instnt removes compliance risks and enables businesses to manage cyber risks efficiently, thus improving operational efficiency and cyber security.
If you need to shift data control to your users and keep pace with cybersecurity compliance needs, connect with Instnt today to schedule a demo.
Sources:Computer Weekly - Davos 2023: Pervasive cyber crime and cyber security gaps pose severe risk to organisations
Weforum.org - Global Risks Report 2023: How organizations can respond
Instnt - Instnt Guide to KYC Verification and AML Compliance