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31
Mar

Three risks financial firms face when not being serious about protecting their digital assets

Every company has digital assets, but not all of them are doing enough to protect them, which could lead to massive problems down the line. 

In a new blog post, MirrorWeb, the RegTech firm, reveals the three risks financial firms face when failing to be proactive in their defence of their digital assets.

It kicks off by explaining that digital assets are all digital communications, customer data, internal documentation such as business plans and strategies, intellectual property, brand assets such as artwork, marketing content, contracts and agreements, and all internal business documentation.

Although, MirrorWeb did note that that list was not exhaustive. Nevertheless, it serves its purpose as a guideline for the digital assets businesses need to protect.

Being proactive in these digital defences can help financial firms avoid three huge risks: regulatory crackdowns, poor digital conduct and running the risk of trademark infringements.

The risk of regulatory crackdowns have increased over the last decade with the introduction of laws like the EU’s General Data Protection Regulation (GDPR) or the California Consumer Privacy Act (CCPR). These laws often highlight that private companies must protect both their own and their customers’ data at all costs or risk having to cough up massive fines.

Poor digital conduct could result in businesses having a poor idea of the risks they face as the economy is becoming more digitalised. Often, this is due to the companies having failed to appoint an individual to be in charge of digital risks. Not having an individual like this could become a problem legally as well. In the UK, regulators are considering expanding the Senior Managers & Certification Regime (SM&CR) to include forcing business to appoint an individual to be in charge of their digital resilience. The proposal came after several financial institutions suffered massive service outages.

Being proactive of the protection of digital assets could also mean businesses will have an easier time protecting themselves against trademark infringements.

“Safeguarding digital assets is something businesses cannot ignore,” MirrorWeb wrote. “These need to be protected against cyber-attacks, trademark infringement and – ultimately – time. Failure to do so could be extremely costly to a business, resulting in fines, litigation costs and generally lost value. Unfortunately, the true cost of lost digital assets may only become clear in the future when 20/20 hindsight means people realise more should have been in the moment to support preservation.”

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