How Financial Institutions Can Protect Their Assets
Most people consider protecting their monetary assets to be a top priority, and financial institutions are no different. Just like individuals, financial institutions need to protect their assets from losses that could happen due to fraud, embezzlement and other types of criminal activity.
Security Measures
As the threats against financial institutions continue to increase, security protections must improve and adapt. Financial institutions may need to hire third-party providers or work with expert consultants to find ways to combat threats including the following:
- Employee fraud
- External hacking
- Ransomware
- Third-party vendor data breaches
Improving digital security, creating effective employee training programs, and increasing encryption are actions that may help reduce a financial institution’s losses.
Insurance Options
It is also possible for a financial institution to pursue insurance coverage that can protect its assets in the event of accidental exposure or fraud. There are several different aspects of financial institution bond coverage. The experts at Financial Guaranty Insurance Brokers, Inc. state that these bonds may act as insurance to address some of these common risks:
- Counterfeiting
- Securities fraud
- Computer fraud
- Forgery
- Extortion
These financial bonds are generally designed to protect the institution itself, not necessarily the shareholders. Some financial institutions may need to carry bonds in order to meet regulatory requirements.
There are several factors that can put a financial institution’s assets at risk. Financial institution bonds and security measures may provide effective protection.