Cybercrime costs businesses trillions annually – and could erode your reputation. But RegTech helps businesses to comply with cybersecurity rules and keep their customers safe.
It has been estimated that cybercrime will cost global businesses $6 trillion annually by 2021. If that figure is accurate, the cost will have doubled in just 6 years. To give some perspective, that’s greater than the third-largest economy in the world, Japan.
That’s an extraordinary growth rate. But it’s not that surprising when you think about the growth of cybercrime opportunities and the empathy economy we’re living in.
Eroding customer trust
As well as having a financial impact on businesses, cybercrime could prove fatal to brands.
As the Internet of Things continues to expand, cybercriminals will have access to our data, homes, businesses and personal devices. Cybercriminals could control your finances, impersonate your business or customers, and access sensitive personal data.
In a matter of minutes, these criminals could erode the trust that a business has spent years building with their customers.
3 reasons why RegTech is the perfect weapon against cybercrime
Regulatory technology (RegTech) offers a robust defence against financial and reputational threats and can help to mitigate your cybersecurity risk.
RegTech enables you to:
- Gain visibility of your regulatory obligations
- Align compliant policies and controls with current regulatory frameworks, such as NIST and ITIL
- Establish an audit trail to demonstrate your compliance decisions and actions.
All of this means your compliance, IT and cybersecurity teams can focus on what they do best – creating and applying effective policies and controls.
ROI and change management
Although RegTech offers a robust defence, it’s not typically seen as a weapon against cybercrime. Instead, it’s often thought of as a new opportunity to optimise efficiency, reduce manual labour and deliver greater efficiency for compliance teams.
But as with all new technology, when it comes to implementing RegTech the questions of ROI, change management and legacy IT systems come to the fore. Unwieldy procurement processes and delays bring compliance risks and therefore increase the potential for enforcement fines and enduring reputational damage.
Technology investment has previously been seen as a capital expenditure (CapEx) – a significant investment at sporadic times. But that mindset needs to evolve. Investment in technology should be seen as an ongoing part of the compliance and anti-fraud function of a financial institution. RegTech should be an operational expenditure (OpEx).
A new marketplace
RegTech may have been part of the FinTech scene since the ‘90s, but it’s really come into its own following the 2008 financial crisis. The potential offered by the power of AI, big data analytics and machine learning means there’s now an established RegTech marketplace out there.
As that marketplace matures, regulatory compliance technology will become the mainstay of cybersecurity, AML and KYC teams throughout financial services institutions.
Named in the Medici Top 21 Global RegTech firms, CUBE is leading the way in this marketplace. Their AI-powered solution helps financial institutions stay compliant with multi-jurisdictional, cross-border cybersecurity regulations.
Lack of technology puts reputations at risk
Nearly 60% of the world’s population are now active internet users. That’s 4.48 billion people – a number that isn’t likely to decrease. We’re on a trajectory of connection, leading to more and more data being accessible online. Fears about the theft of personal data and online banking fraud are top of mind for many.
The potential for reputational damage to those financial institutions who aren’t yet adopting new, automated technology to support their compliance efforts are huge.
These businesses are opening themselves up to the avoidable risks that come from non-compliance. But they’re also making their customers vulnerable. They owe it to their customers and employees to be on top of their compliance requirements.
The costs of slipping up go beyond trillions of dollars. For once these businesses lose their reputation, what will they have left? Regtech is not only a vital weapon against cybercrime, it also preserves your customers’ trust. And you can’t put a price on that.
