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February 22, 2024
Learn how CFOs can protect companies from financial fraud in this tech-heavy era.
In the digital era, what happens in Vegas ends up on YouTube. On that note, let us give your mind a little workout: Can you draw a parallel between a company’s CFO and the Powerpuff Girls?
At a loss of words? Here’s what makes them two peas in a pod:
The Powerpuff Girls stay up all night, ‘fighting crime, trying to save the world, and they come just in time’…and quite like that, the CFO of a company acts as the knight in shining armor, relentlessly working towards saving the company from the Digi Mojo Jojo’s slowly combating financial fraud and data-risk, one potential threat at a time. Given the data theft and hacker-heavy climate, one can only imagine how cautious companies need to be when it comes to the protection of their financial data, and that’s where the invisible superheroes, the business messiahs, the CFOs, step in and take over with their cyber secure action plan.
Let’s dive in and take a closer look at five ways in which CFOs mitigate financial risks in this digital age:
A data breach or cyber theft can significantly affect a company’s growth. According to an IBM report, the global average data breach cost in 2023 was USD 4.45 million, with a 15% increase over three years. The usage of AI, its advancement over the years, and the figures mentioned showcase that cybersecurity is, in fact, a pivotal protagonist in ensuring the growth of a company. The cost of data fraud is not merely an IT risk anymore; it is a dreadful occurrence that can cost a company billions of dollars spent on legal remuneration and a loss of customer loyalty. To avoid such an occurrence, the first and most crucial step in this journey is to acknowledge that cyber security measures are essential for a company, for, after all, you don’t want it to be that villain in the film that eventually wins.
According to research by Kaspersky, over the past few years, 33% of cyber incidents targeting businesses in the Asia-Pacific region happened because employees knowingly disregarded security rules. Hence, it’s crystal clear: there’s a pressing need to dial up security awareness amongst the workforce. So, one of the first things CFOs do to combat risks is to provide all employees with fundamental cybersecurity training.
Additionally, investing in ongoing training for IT security experts is crucial. This ensures they’re always ahead of any curveballs thrown at them, equipped to battle off even the most sophisticated cyber threats. By prioritizing basic cyber hygiene and continuous skill enhancement for employees in the company, the goal is to take proactive steps to safeguard the organization against potential cyber-attacks and hacking.
When a company hits a roadblock because it needs more experts, it’s like trying to navigate a maze without a map. But fret not; that’s when CFOs step in and outsource data protection to one of the many specialist agencies out there. The CFO is crucial in ensuring efficient audits and risk management plans. By engaging external auditors, companies can benefit from error-free reports, timely risk assessments, and prevention of potential failures stemming from policy changes (it’s easier to keep up with the Kardashians than these policy changes) or operational shifts. External financial auditors streamline processes, eliminating duplicate actions and improving overall audit quality. Too many cooks may spoil the broth, but not when they’re experts. With their well-trained professionals and tech-savvy wizards, these agencies swoop right in with the skills and knowledge to cybersecure the day to solve your problems faster than you can say “help!”
It is a common fact that in most companies, due to their organizational structure, the last word, especially when it comes to budgets, belongs to the CEO; however, cyber threats demand a broader perspective. CFOs must step up their game and work with the CISO (Chief Information Security Officer) to safeguard the company against cyber risks. Just think about it: financial understanding and tech expertise from others are a recipe for success. Working together, the CFO and CISO can develop foolproof financial strategies to ensure investments align with mitigation objectives. Further, the ROI on these investments can be tracked to guarantee that the money isn’t wasted and the company remains resilient to threats.
To mitigate financial risks in this digital age, CFOs must prioritize installing robust cybersecurity software to protect against external threats. Cybersecurity measures monitor and eliminate potential attacks and address vulnerabilities through patch releases (commonly known as bug fixes), amping up the company’s risk mitigation strategy and thereby maintaining the company’s financial well-being. Another big one is cyber insurance. CFOs often implement cyber insurance policies to protect them against the financial risk of growing a company in this dynamic digital environment.
So, remember to stay safe and cyber-secure.
Want to know more? Escalon has helped over 5,000 companies across a range of industries improve their compliance regarding internal controls and streamline processes. Talk to an expert today.
With 6 years of experience in copywriting and social media management across genres, Devayani's heart lies with weaving words into stories and visuals into carefully crafted narratives that’ll keep you wanting more. She carries with her, her pocket notebook, a trusted confidante that goes with her wherever she goes, and scribbles down into it anecdotes on the go. Her secret weapon for keeping all things copy interesting! Apart from writing, Devayani is huge on travelling. You'll find her booking her next adventure while she's on her current one. And while on those adventures, you'll find her devouring true crime books one after the other. Whether it's a low down on a recent case or one that occurred 70 years ago, she can cook up a story narration you'll never forget.
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