Cybersecurity Threats in Saudi Arabia’s Finance Industry Pose Significant Risks
As Saudi Arabia continues its digital transformation, local financial institutions are embracing modernization by digitizing their services. However, this shift towards a more connected and online economy has introduced new cybersecurity threats that must be addressed.
The Finance Industry’s Vulnerability to Cyberattacks
The finance industry is particularly vulnerable to cyberattacks due to the vast amount of personal and financial information it holds. Furthermore, the sector’s intricate links with other parts of the economy make successful attacks highly disruptive.
- A recent report by Ponemon Institute revealed that the global rate of cyberattacks in the financial services industry is higher than any other industry, with costs reaching $18.3 million annually per company.
- Saudi Arabia has been a prominent target of cybercriminal activity over the past decade, with research by IBM showing that the cost of data breaches in Dubai and Saudi Arabia rose by 6% during the pandemic, costing businesses an average of $6.93 million per individual breach.
The Impact of Remote Work and E-commerce
The pandemic’s shift to remote work and increased e-commerce activity have contributed to this rise in costs. As financial institutions seek to offer customers online and mobile banking, a lack of operational planning has made Saudi Arabia’s financial sector particularly vulnerable to cybercrime.
Protecting Against Cyber Threats
To protect themselves from cyber threats, financial institutions must take several steps:
Conduct a Risk Assessment
- Identify the business areas most vulnerable to attack.
- Carry out the assessment by a team of experts with experience in both cybersecurity and the finance industry.
Implement Robust Identity and Access Management Controls
- Multi-factor authentication
- Password management
- Activity monitoring
- Encrypt sensitive data both at rest and in transit
Establish a Dedicated Cybersecurity Resource
- Monitor and respond to threats in a timely manner.
- Have a disaster recovery plan in place, including procedures for restoring data and systems.
Regulatory Environment
The regulatory environment for cybersecurity in Saudi Arabia is still developing. The Saudi Central Bank’s Cyber Security Framework, introduced in April 2017, requires financial institutions to:
- Deploy a board-endorsed, defined cybersecurity governance structure
- Develop a clear cybersecurity policy
Financial institutions should also be aware of Saudi’s new Personal Data Protection Law, which contains provisions relating to the processing of personal data and the protection of privacy. Failure to comply with these regulations can result in up to two years imprisonment and fines of up to SAR 5 million.
Conclusion
In light of these new regulations, financial institutions must ensure they have adequate policies and procedures in place to protect customer data and digital systems. The digital landscape is constantly evolving, and financial institutions must now take a more proactive approach to cybersecurity.