In an era marked by escalating cyber threats, finance and cybersecurity departments can no longer operate in different lanes, where one focuses on managing financial risks and protecting company assets. At the same time, the other helps guard against cyber threats. That’s because increased attacks on financial processes and the evolving regulatory landscape necessitate CFOs to step out of their financial mold and actively shape and implement cybersecurity strategies within their organizations.
The Growing Cybersecurity Threat to Finance Departments
As cyber threats become more targeted and sophisticated, finance departments face many new security challenges, beginning with financial processes. Now more than ever, these processes are viewed as lucrative targets for cybercriminals driven by the desire to secure vast sums of money, disrupt businesses, and deliver aftershocks throughout the financial sector.
CFOs and CISOs need to work together more closely than ever because finance, the vendors they work with, and, ultimately, payments are constantly under attack. Bad actors specifically target individuals with access to funds, knowing that if they can successfully dupe them, the potential attack payout will be far more significant. This makes finance teams a prime target for sophisticated social engineering schemes and cyber fraud.
They do this in various ways, including business email compromise (BEC) attacks that impersonate vendors or executives. These attacks have become alarmingly common—according to a report from Artic Wolf titled The State of Cybersecurity 2024 Trends Report, 70% of organizations have experienced a BEC attack, and the frequency of these attacks is growing dramatically. Considering these, it should come as no surprise that CFOs must prioritize cybersecurity to protect financial assets and the organization’s stability.
Increased Regulation
As if the possibility of major cyber-attacks wasn’t enough to keep CFOs up at night, new regulatory requirements also give them nightmares. In 2023, the U.S. Securities and Exchange Commission (SEC) introduced new mandates requiring publicly traded companies to disclose material cybersecurity incidents. While the incident itself falls under the purview of the CISO, the CFO must report it and provide all the critical details (nature, scope, and timing of the incident, as well as the material impact) in a four-business-day window. Any failure to comply in this timeframe can lead to significant regulatory penalties, including fines as high as $25 million.
If the CFO’s plate weren’t full enough, one additional responsibility would be managing cyber insurance. CFOs are experts in assessing financial risks, which is why cyber insurance responsibilities fall to them. However, to be effective here, CFOs must better understand the intersection of finance and cybersecurity to ensure the organization meets these standards.
Building a Collaborative Defense: Five Key Strategies for CFOs
Building a collaborative, multi-faceted strategy that brings finance and cybersecurity together is essential for any CFO stepping into cybersecurity. Here are five crucial ways CFOs can do just that:
Cybersecurity is a Team Sport
As mentioned throughout this article, CFOs must join forces with the CISO and the business’s cybersecurity teams. While the two sides have traditionally had distinctly different goals and mandates, the line between them is becoming increasingly greyer. Given the heightened threat landscape, the benefits of a united front far outweigh the desire to maintain the status quo. Finance professionals bring critical insights into vulnerable financial processes, while cybersecurity experts can help identify potential threats. A collaborative approach enables faster incident detection and response, significantly strengthening the company’s overall security posture.
Implement Automation to Reduce Human Error
Cybercriminals are not always the biggest threat to a company. Sometimes, it’s your own employees who will cause the most harm. Despite all the technological advances, human error remains one of the most significant vulnerabilities in financial processes. According to TrustMi’s The State of Business Payment Security research, 50% of respondents said they experienced business payment fraud resulting from human error. Much of this can be attributed to the many manual tasks that remain a part of many payment validation and vendor management processes. Eliminating these errors requires automation.
Automated systems can continuously validate payment data, flag suspicious activities or discrepancies in real-time, and reduce the chances of fraud. Automated tools can streamline processes such as invoice reconciliation, freeing finance teams to focus on more strategic tasks. The result is improved accuracy and reduced time and resources spent on repetitive tasks, reducing the overall risk of human error.
Enhance Supply Chain Security
Vendor supply chains are one of the biggest vulnerabilities that organizations face today. Many third-party businesses vital to a company’s day-to-day operations lack the same mature cybersecurity infrastructure. For example, a third-party payment processor or supplier may not adhere to robust security protocols, which could introduce vulnerabilities, exposing the company to financial losses and data breaches.
CFOs should prioritize rigorous vetting and continuous monitoring of all entities involved in payment processes, including vendors and third-party partners. By implementing strict security standards for third parties, CFOs can enhance supply chain security, build a safer environment, and minimize the risk of outside breaches affecting the business.
Leverage AI for Defense Against Sophisticated Threats
Artificial intelligence (AI) and machine learning (ML) have transformed cybersecurity, and they can have a similar impact on CFOs, helping them more easily detect sophisticated fraud attempts that would otherwise go unnoticed. For example, AI can detect abnormal payment activities (unusual payment requests, abnormal behavior patterns), allowing CFOs to spot abnormal patterns in payment behaviors or unusual vendor requests.
Drive End-to-End Visibility in Financial Processes
For CFOs, gaining end-to-end visibility into financial processes is essential for spotting potential weaknesses or anomalies and taking proactive actions before any damage is done. By understanding how each part of the financial process interacts with the organization's systems and technologies, CFOs can better pinpoint vulnerabilities and respond to emerging threats. In parallel, they can support the business’s compliance efforts by making it easier to demonstrate their security controls in audits and regulatory reviews.
Today’s cyber threats landscape cannot be mitigated with technological innovations alone. Fighting back requires a unified response that includes both the CFO and CISO. These financial leaders bring a unique perspective on cybersecurity, understanding where financial vulnerabilities lie and how best to balance financial risk with the need for resilient defenses. This is why it’s time for CFOs to claim their seat at the cybersecurity table. Once in place, they can help businesses significantly strengthen their security posture and ensure it is better equipped to protect all assets and thrive in an increasingly digital world.
