Leslie Haoen Shen Outlines the Importance of Cyber Security in Corporate Finance

Today’s technology world is heavily reliant upon cybersecurity, and corporate finance is no different. Without proper security, corporate financial details and bank accounts would be exposed to the actions of cybercriminals and other bad actors.

Leslie Haoen Shen, a senior financial executive from Toronto, ON, explains why cybersecurity is so important in corporate finance and how it affects the corporate world as a whole.

What is Cybersecurity?

Cybersecurity is the practice of protecting sensitive data, devices, and computer networks from intrusion. It is specifically intended to keep out criminals and to protect the privacy of individuals whose data is stored in the system.

Today’s world largely runs on computers, and cybersecurity is paramount across all industries. From transportation to communication and finance, every industry needs to apply cybersecurity principles to its proprietary information.

The Risks of Not Maintaining Proper Cybersecurity

The risks of poor cybersecurity can be far-reaching. Firms may lose their reputation. They may lose clients. They may lose money. Their business operations may be disrupted.

Canadian companies lose significant amounts of money and operational freedom due to poor cybersecurity. According to StatCan, one-fifth of Canadian businesses report being impacted by cybersecurity incidents in 2019. Ten percent of businesses lost revenue, and 6 percent noted that the breach damaged their business’s reputation. Over half of all affected businesses reported that their employees were prevented from carrying out their daily tasks.

Without proper cybersecurity, Leslie Haoen Shen warns that companies are vulnerable to malware attacks that could erase complete systems, hackers breaking in and altering important files, and attackers turning computers into weapons to damage other businesses and individuals. Attackers may also take advantage of proprietary financial information to steal money or secrets.

Threats to Corporate Finance Cybersecurity

Cybersecurity threats can come from various sources, from small-time operations run by individuals to attacks by nation-states. Individuals may be tempted to steal data because they can resell it. Organized crime networks may believe that cybercrime is a low-risk way to make money on the black market. Corporate competitors may be looking for any way to get an advantage in negotiations and could find ways to give clients a better offer.

Nation-states may be interested in destabilizing the financial systems by attacking their financial base. They may want to protect their own companies’ advantage in areas of strategic importance.

“Hacktivists” may be motivated by a sense of moral or political opposition to a target company. These hackers could sabotage a business to prevent it from carrying out its goals.

Finally, information can be exploited by current employees or contractors. They may be looking to make a quick profit, or they may be disgruntled about their jobs and looking for a way to get back at their employer. They could also be plants installed by competitors specifically to obtain sensitive information from their real employers.

Information That Must Be Protected

Corporate finance professionals need to protect huge volumes of data from cybercriminals and other bad actors. Corporate finance transactions provide a rich source of information and saleable data to cybercriminals, and the vulnerabilities can seem endless.

A few examples of the types of information that corporate finance needs to keep secure are the intellectual property of companies that are about to be sold, financial data of companies that are taking part in financial transactions, and contracts between companies and the financial institutions that serve their banking and lending needs.

Most cybersecurity experts believe that financial transactions are one of the most vulnerable types of information. Any systems that can protect transactions are greatly valued.

Hackers’ Methods for Stealing Data

One of the most popular ways for a hacker to access a sensitive computer system is through a “phishing” attack. Within a phishing attack, emails imitate legitimate messages and encourage unsuspecting employees to click on links. These links can take them to pages that give up information or passwords. It is then easy for hackers to gain access to protected systems.

Malware is another method that cybercriminals use to steal data. This involves uploading a package of dangerous code to a vulnerable computer. Malware could be disguised as a useful app or a tempting game.

Ransomware has become another common way to steal data. This software takes a computer hostage and demands money, usually in a cryptocurrency, before the computer system will be unlocked.

Methods of Protecting Corporate Financial Information

Fortunately, cybercrime protection experts have many items in their toolkits for preventing damage to systems and companies’ reputations. Here are a few examples:

Firewalls

Firewalls are one of the primary methods with which experts protect computer systems. Firewalls are network security devices that can monitor traffic. They block data according to certain security requirements. They establish barriers between a company’s network and the Internet or other external sources.

Keeping Systems Up to Date

Old virus definitions or malware warnings may lead cybercriminals to opportunities. Cybercriminals frequently exploit this type of weakness in computer systems.

Employee Training

Malware, phishing, and ransomware are often allowed onto sensitive computer systems by unknowing employees. Employees at all levels must be trained to recognize these attempts and refrain from falling for cybercriminals’ schemes.

Addressing Vulnerabilities

Corporate finance professionals must be aware of the high possibility of cybercrime that could expose their sensitive data and cause their companies to lose their reputations and clients. Leslie Haoen Shen wants all corporate finance professionals to understand that they need to follow safety procedures and make sure that their IT and cybersecurity staff are properly trained, along with their rank-and-file employees.

This article does not necessarily reflect the opinions of the editors or management of EconoTimes