Explain the concept of cyber risk and critically discuss the relevance of managing this risk within a bank?

 

Explain the concept of cyber risk:

Cyber risk is also known as cybersecurity risk, is the potential exposure to loss or harm stemming from an organization's information or communications systems. It is a risk causing losses in finances and damage to the reputation of the organization due to a failure in the inter-connected IT system.  . A better, more encompassing definition is , it is the potential for loss or damage when a threat exploits a vulnerability.  Cyber attacks, or data breaches, are two frequently reported examples of cyber risk. However, cybersecurity risk extends beyond damage and destruction of data or monetary loss and encompasses theft of intellectual property, productivity losses, and reputational harm.

Critically discuss the relevance of managing this risk within a bank:

With all the cyber risk that exist today, banks are more vulnerable than ever to becoming the next victim of a malicious cyberattack. The global banking system has faced significant changes within years in terms of transactions and operations, which is influenced by technology and innovations. However, there are specific concerns within systemic operations and information technology innovation. Banks are depending on third-party systems to offer several digital services. Thus they depend on systems that are out of their control. This has raised the awareness of hackers and criminals of technological threats and weaknesses that would allow them to hack banking systems and steal valuable information and funds. Cyber threats and attacks are challenging due to the rapid

change in technologies. Banks should take into consideration cyber-attacks in order to protect their clients. Cybersecurity is a process designed to defend the computers, servers, networks, and digital data from unauthorized access and destruction or attack in cyberspace. Organizations must be concerned about the safeguarding of their financial data, intellectual properties, and their reputation as a crucial part of their business strategy. The goals of businesses and governments in their use of the cybersecurity component are not only to protect their confidential information but also to ensure the availability of the information and maintain its integrity.

Step-by-step explanation

Everyone is a source of cyber risk. Public failures become personal. Personal failures become public. Even seemingly small lapses in judgment or policy oversight can have dire consequences. Over sharing on social media can reveal critical personal information that threat actors can use. Not logging out of a system at the end of the day is a wide open door to information thieves. 

Cybersecurity is a key concept to introduce in many organizations due to the increased reliance on technology in conducting business including the banks. Thus, firms across the world need to be aware of the significance and application of cybersecurity. One of the main objectives of cybersecurity is to protect the data and information from illegal theft and damages as these acts have increased widely in recent years.