Cyber Strong: Strengthening Your Risk Posture in Financial Services
In the high-risk, high-reward world of financial services, cyber risk isn’t just a tech topic—it’s a boardroom priority. At Knightcorp, we’ve witnessed how swiftly a single breach can cascade into operational paralysis, regulatory probes, reputational and financial harm. As threat actors become increasingly sophisticated, a reactive approach to cyber defense is no longer sufficient.
Financial institutions—from boutique wealth managers to digital-first lenders—are being tested daily. It might be a ransomware attack on your data, a phishing attempt impersonating an executive, or a supply chain attack via unsuspecting third-party vendors. The question isn’t if you’ll be targeted. It’s when, and how prepared you’ll be when it happens.
Are You Exposed?
A strong cyber risk posture begins with insight. What’s your current exposure? Where are the weakest links in your digital defence? Most breaches don’t occur because of complex, movie-style hacks. They occur due to unpatched software, inadequate access control, or employees clicking on malicious links. Having insight into these vulnerabilities is the first step to building the digital infrastructure you need.
For financial services firms, the attack surface is broad and may include:
- Sensitive customer data— a goldmine for hackers and attackers.
- Mobile banking apps and digital platforms—these portals increase entry points.
- Third-party fintech partners—vendors can introduce vulnerabilities beyond your control.
Start with a thorough cyber risk audit. Look beyond the perimeter—internal threats and outdated systems are often the blind spots that are most easily exploited.
A Multi-Layered Defence
As brokers who work extensively with insurers, Knightcorp understands what underwriters look for when assessing cyber risk. Companies with multi-layered cyber defences often receive more favourable insurance premiums.
Security hygiene is the first layer, comprising regular software updates, multi-factor authentication (MFA), and data encryption. Then come the deeper structural changes: network segmentation, zero trust architecture, and continuous monitoring.
But even the best technology is useless without human awareness. Employee training remains one of the most cost-effective defences. Simulated phishing exercises, role-specific awareness sessions, and regular security briefings help transform your workforce from a vulnerability into a security asset.
And don’t overlook incident response planning. A clear breach protocol—covering containment, notification, and recovery—can save millions in damage and reputation loss.
Compliance Is a Strategic Imperative
Financial firms in Australia operate under intense regulatory scrutiny, which includes cyber regulations. APRA’s CPS 234 standard is unambiguous: accountability for information security rests with the board. Firms must protect their systems and demonstrate they have the frameworks and controls in place to respond swiftly and effectively.
It’s not just about satisfying the auditors. Regulators are beginning to view cybersecurity as a form of operational resilience, critical to market stability. Failing to meet expectations invites penalties, negative publicity, and damaged client confidence.
Insurance: The Foundation of Your Defence
Even with best-in-class cyber hygiene, breaches can still occur. That’s where cyber liability insurance becomes vital—not just as a fallback, but as the strategic ballast of your overall posture.
According to IBM’s 2024 Cost of a Data Breach Report, the global average data breach cost is $4.88 million, with the financial sector consistently among the hardest hit.¹ Cyber insurance can help cover:
- Legal and regulatory costs
- Crisis communications and public relations
- Forensic investigations
- Business interruption losses
- Data restoration and ransomware negotiations
But not all policies are equal. Coverage needs to be customised to your risk profile, regulatory environment, and operational structure. That’s where expert brokers bring real value—not just in price, but in policy construction.
The Knightcorp Advantage
At Knightcorp, we’ve spent years advising financial services clients on how to build resilience into every layer of their operations. From risk assessments to tailored cyber insurance solutions, we bring deep market insight to a fast-evolving threat landscape.
Cyber risk posture isn’t a once-a-year project. It’s an ongoing process—and a mindset. It requires a mix of human vigilance, leading-edge technology, transparent processes, and robust protection. Strengthen it, and you do more than guard against loss. You earn trust. You satisfy regulators and reassure underwriters. You keep your firm in the game, no matter how hostile the terrain becomes.
DISCLAIMER: This information is provided to assist you in understanding the risks, implications, and common considerations for your industry. It does not constitute advice and is not complete. Please contact Knightcorp Insurance Brokers for further information.
DISCLAIMER: Third-Party Links: This article may contain links to external websites or content operated by third parties. These links are provided for your convenience and information only. Knightcorp Insurance Brokers does not endorse, approve, or accept responsibility for the content, accuracy, or security of any externally linked site.
Please note that any third-party websites are not covered by Knightcorp Insurance Brokers’ policies or procedures. We make no representations about the suitability of any information, product, or service contained on those sites for your needs. Use of third-party links is at your own risk, and we recommend reviewing their terms, conditions, and privacy policies.
For advice specific to your insurance needs, please contact your Knightcorp Insurance Brokers directly.
