When digital businesses are welcomed, they have created an even greater number of uncertainties. This demands that CEOs and business leaders prioritize innovation as a top strategic priority. If they want to achieve their targets in the century’s goal and growth, they should have an open appetite to challenge cyber risks.
Today, it is easier than ever to challenge dynamic digital businesses and drive radical change without advanced risk control models.
Apart from other sectors, the financial industry is more liquid in form and exposed to disruption risks. The more the sector is digitized, the more it becomes exposed to technological risks, specifically the exponential risk of financial crime or cybercrime. Today, insurers prioritize consulting and mitigating this risk.
Most technological bankers and insurers aim to make their services invisible and seamlessly integrated into their customers’ lives, thereby managing their expectations and providing optimum satisfaction.
However, these technological-driven, digitized bankers and insurers will also face cyber-attacks and the risk of financial crime. Financial crime is becoming a major concern for all leaders, including board of directors, CEOs and other executives.
Due to a delay in implementing proper control systems, companies suffer potential damage to their liquid assets, customer information, stored data, and other intangible assets.
Cyber incidents are not only an emerging risk for bankers and insurers, but they will also impact the telecom industry.
In the Ethiopian financial and telecom industries, digital transformation has become a strategic imperative for competition and survival. For digitalized visionary leaders, nothing will challenge them more than exponential financial crime or cyber-attacks.
This risk is vicious and affects all aspects of IT and core business. Choosing the right core solutions, integrating with digital power supplies, and outsourcing some support systems require careful consideration and attention. Managing these risks is the biggest and toughest job in dealing with financial crime and cyber-attacks, and it is frequently demanded by the CEO to analyze and measure their impact on the company. Thus, the job of IT specialists requires unusual effort and daily reports from their departments provide essential strategic input to convince everyone in the company. However, the board of directors needs assurance of the business’s stability in the face of such destructive risks.
Managing technological risks will not only give confidence to the company’s leaders but will also uphold the brand value of the company for the end users who place their trust in them. Financial crime or cyber attack, if not managed, can destroy all values (extrinsic, intrinsic, and credence value).
The knowledge of cloud technology, intelligent automation, and digital labor effectiveness becomes meaningless and may be canceled from budget items due to non-willingness to suffer again.
Financial risk is exponential due to its short digital lifespan on a certain IT system.
Since companies incur huge costs, the attack will leave them without getting ROI. As they try to manage the attack, every core system at their disposal will become obsolete. Digitalized businesses are always built upon technology with a shorter lifespan and urge companies to focus on cyber-attacks and financial crimes. This case is more severe in banking, insurance, and telecom services.
Cyber attackers, using malware or social engineering, can gain access to valuable information, such as credit card numbers, customer personal identification numbers, login credentials, and government-issued identifiers. Weak patch management, legacy systems, and poor system log monitoring were cited as the main reasons why digital financial service (DFS) providers’ systems are susceptible to hacking attacks. In addition to financial losses resulting from a data breach, providers’ reputation and customers’ trust are at risk.
The fraudsters accessed sensitive customer information, such as account types and last transactions, which allowed them to pose as legitimate customers and apply for loans in the victim’s name.
To protect against data breaches, DFS providers need to regularly update their systems and software, patch their systems, use strong encryption for data at rest and in transit, and implement 24/7 system log monitoring.
So far, it has been observed in digital businesses, such as banking, insurance, and telecom, that no matter what networking they use, malicious individuals can hack past security precautions to gain access to stored information. These risks can be managed through other soft skills, like firewalls. In today’s environment, it is unrealistic to expect that defenses can prevent all cyber incidents. The financial industry should continue developing capabilities for detecting incidents when they occur, minimizing the impact on business and critical infrastructure, and tying these capabilities together in a comprehensive framework.
Threat actors are increasingly deploying a wider array of attack methods to stay one step ahead of financial services firms. For example, criminal gangs and nation-states are combining infiltration techniques in their campaigns, and they are increasingly leveraging malicious insiders. As reported in a Deloitte Touche Tohmatsu Limited (DTTL) survey of global financial services executives, many financial services companies are struggling to achieve the level of cyber-risk maturity required to counter the evolving threats.
Although 75% of global financial services firms believe that their information security program maturity is at level three or higher, only 40% of the respondents are very confident that their organization’s information assets are protected from an external attack. This is particularly true for larger, more sophisticated financial services companies.
Threat actors are increasingly deploying a wider array of attack methods to stay one step ahead of financial services firms. For example, criminal gangs and nation-states are combining infiltration techniques in their campaigns and increasingly leveraging malicious insiders. Some researchers depict global financial service executives and many financial services companies as struggling to achieve the level of cyber-risk maturity required to counter the evolving threats.
Nothing challenges the digital business more than cyber-attacks. If they occur, they can destroy a company’s endeavors.

Asseged G/Medhin is CEO AT(@t) Insurance Brokerage & Consulting Firm. You can reach him via assegedg42@gmail.com