With the holidays right around the corner, financial service companies are preparing for a busy shopping season.
Public trust in the security of digital purchases has had a hand in the boom of online shopping. Consumers are now more likely to visit digital storefronts, instead of brick-and-mortar locations. As of 2022, an estimated 2.14 billion purchase goods online and at least 75% of consumers shop online at least once a month.
With every online transaction, gift purchase, or swipe of a card, financial services are tasked with keeping data secure.
So, with holiday shopping ramping up, what challenges should financial services be prepared to tackle?
Problem #1: How To Prevent Data Breaches?
A data breach can cost millions, tarnish a company’s reputation, and leave customers doubting that their information is safe. In fact, according to the Ponemon Institute and IBM’s Cost of a Data Breach Report, the average total cost of a data breach increased from $3.86 million to $4.24 million in 2021.
Cybersecurity can feel like an endless game of one-upping bad actors. Even large companies struggle to keep up with digital innovation which has resulted in an ever-increasing number and complexity of cyber attacks.
In a digital world where automated attacks can quickly overwhelm manual monitoring attempts, having adept and skilled professionals in place is critical to a company’s continued prosperity and longevity.
Solution: Invest In Cybersecurity Preparation and Plan Ahead
To tackle the cybersecurity threats attempting to infiltrate your organization, it’s crucial to develop a two-pronged plan – a prevention strategy and a response procedure.
Prevention Strategy
You’ve likely heard that an ounce of prevention is better than a pound of treatment, which is particularly relevant to preventing cybercrime.
Financial services should reinforce their cyber protocols and ensure that their team is skilled, supplied with appropriate software and platforms, and has the bandwidth necessary to handle the deluge of attacks. This can be accomplished either by outsourcing to third-party providers or investing in internal infrastructure and employees by hiring new employees with up-to-date skills or upskilling your existing workforce.
Response Procedure
Should bad actors breach your organization’s data stores, it’s vital to have a plan of action in place.
Shockingly few companies have a solid breach response plan in place, and time wasted scrambling to decide what to do, who has access to what, and which files may have been compromised lets whoever has infiltrated run amock in your system.
To be fully prepared, financial services should develop, test, and implement an incident response plan to minimize the potential fallout of a breach.
Related reading: Top 3 Cybersecurity Pain Points in 2022
Problem #2: How To Reach New Customers?
No matter the industry, product, or company size, the goal is ultimately the same – growth.
But for financial services, a saturated market can make it difficult to differentiate themselves from competitors and attract new customers. Many organizations find themselves pondering as the biggest shopping season ramps up, “how do we stay ahead of the competition and reach new customers who prefer online experiences?”
Solution: Leverage The Power of Data
To attract new customers, financial services can use the data they collect, which we discussed protecting above.
Invest in Data Scientists who are able to decipher actionable insights from data collected about existing customers and use models to forecast emerging market trends. By making data-backed, research-based decisions, your organization can develop targeted promotions and bring in new customers, all with information you already had on hand.
Related reading: The (Data) Science Behind Netflix Recommendations
Tech Talent Solutions Made For Financial Services
Whether it’s the holiday shopping season or not, financial services have no shortage of challenges: legacy technology, cybercrime, and connecting data across brick-and-mortar and digital products.
Let Flatiron School help modernize your business with training and talent services across Cybersecurity, Data Science, Software Engineering, and Product Design.
