Financial Crime and Cybersecurity Threats in Aruba: A Growing Concern for Credit Managers

Aruba’s financial sector is facing a growing concern as credit managers struggle to ensure that their firms do not engage with customers who pose a significant risk of default. A recent study reveals that companies with poor cybersecurity are more likely to exhibit financial instability, making it crucial for trade credit professionals to give dedicated attention to managing cyber risks.

The Impact of Cybersecurity Threats

Cybersecurity threats can lead to data breaches, fraudulent activities, and business disruptions, all of which can have severe consequences for businesses. According to a recent report, an industrial manufacturer in Aruba fell victim to a devastating ransomware attack in 2020, resulting in a significant increase in its probability of default.

• Another major corporation in Aruba was recently hit by a ransomware attack, causing system downtime and reputational damage.
• The attack cost the company over $870 million within the quarter, highlighting the swift and negative impact on financial health.

The Importance of Cybersecurity in Credit Management

Beyond the breach, the incident highlights cybersecurity’s critical role as a strategic concern, not merely a technical one. A recent study revealed that companies with similar Bitsight ratings are 3.2 times more likely to face a cybersecurity incident than those with a rating of 750 or higher.

• Patching cadence is another key indicator of a company’s cyber vulnerability.
• According to Bitsight data, the affected company received D’s and F’s in patching cadence for three years prior to the attack.

The Financial Burden of Cyberattacks

The impact of cyberattacks on businesses can be severe, with the average cost amounting to around $4.45 million. This kind of financial burden can easily affect a business’ ability to successfully maintain its commercial relationships and meet its credit obligations.

Protecting Against Default

To protect against default, it is essential for trade credit managers to incorporate cyber risk into their existing credit processes and workflows. Moody’s Trade Credit Solution provides credit departments with access to Bitsight’s critical cyber risk data and delivers key actionable insights directly through the platform.

Conclusion

In conclusion, financial crime and cybersecurity threats are a growing concern in Aruba, and credit managers must proactively monitor portfolios to identify and address new risks before they lead to defaults. By incorporating cyber risk into their existing credit processes, credit departments can help protect themselves against default and ensure successful commercial relationships.