Banks expose themselves to data breaches in many ways, including exposure via their numerous partners, customers and suppliers, with whom they share files, as well as through inflexible legacy systems and also because of ever-changing regulations between nations.
There are enormous costs associated with data breaches. These can include costs to the bank’s reputation and its brand, likely resulting in loss of market capitalization and shareholder value. There are also significant opportunity costs within sales and customer service and operational costs that have to do with notifying customers whose information has been breached.
It’s important for banks to take a holistic view of the potential for serious data breaches. This approach will enable banks to avoid taking hits to shareholder value, reputation, opportunities and operational costs.