In today’s Finance Pulse, gain insight into how:

• Mid-market businesses are becoming prime targets for cybercriminals, and CFOs must treat cyber risk as a financial strategy instead of a technical issue.

• Hidden financial risks quietly accumulate in enterprise operations and why CFOs must adopt proactive, AI-driven risk intelligence to reduce blind spots.

• Shallow automation in lending can accelerate poor decisions, and how modernizing data, models, and governance can create better outcomes.

Each of these articles is penned by members of Forbes Finance Council, key luminaries shaping the future of finance.

Cyber Threats as Financial Risks for Mid-Market 

Mid-market businesses are under siege as cybercriminals shift focus from large enterprises. Cyber incidents now threaten liquidity and revenue, creating a financial drag. A significant statistic from Accenture shows 43% of attacks target small businesses. With global cybercrime costs projected to hit $10.5 trillion by 2025, it's clear why cyber risk needs to be a financial priority.

Here’s all you need to know:

⚡ Why Mid-Market Firms Are Vulnerable: These businesses face unique exposure due to integrated systems and smaller revenue bases. Cyber events can quickly disrupt cash flow. Ransomware is a prime example, often causing extended financial impact beyond recovery costs.

💸 The Cost Beyond the Attack: Cyber incidents aren't just technical issues—they have profound financial consequences. IBM reports breach costs in the U.S. are climbing. Operational downtime can throttle sales and productivity, especially for firms with tight liquidity.

🔒 Rising Attack Frequency & Insurance Gaps: With nearly half of small businesses experiencing attacks, and limitations in cyber insurance, more risk is retained by businesses. Policies often fail to cover all financial impacts.

🛡️ Strategic Response, Beyond Insurance: Finance leaders should integrate cyber risk into broader strategic planning. Alternative financing, like captives and operational resilience investments, can bolster defenses and align risk with capital strategy, ensuring readiness against persistent threats.

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Hidden Risks: What CFOs Aren’t Seeing 

Fraud and financial risk often lurk within routine operations, especially for large enterprises processing millions of transactions annually. Despite advancements in ERP systems and automation, oversight gaps persist, leaving CFOs vulnerable.

Everest Group research highlights a widening divide between operational efficiency and financial risk management.

Here’s how risks accumulate:

• Risks arise from minor anomalies in processes such as expenses, procurement, and payments.

• Fragmented systems across entities and geographies create blind spots.

• Compliance risks, like Foreign Corrupt Practices Act violations, often stem from prolonged control breakdowns.

📉 Why Traditional Oversight Falls Short: Manual audits and static controls can’t keep pace with today’s transaction volumes. Many firms now accept baseline risk rather than address systemic weaknesses.

🤖 A Shift to Finance Risk Intelligence (FRI): FRI embeds AI-driven, continuous monitoring into financial workflows to detect anomalies and patterns early, helping prevent costly surprises.

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Don’t Automate Mistakes: Rethinking Lending Tech 

Automation can accelerate lending processes, but if built on outdated models or incomplete data, it simply speeds up bad decisions. Financial institutions often focus on quick wins like faster approvals, overlooking the long-term risks of shallow automation, which can erode trust and create instability.

Discover the top insights below:

⚠️ Why Shallow Automation Fails: Many legacy credit models are outdated and don’t reflect today’s diverse borrowers. Also, automating flawed processes can obscure decision-making and introduce risk.

🔧 The Fix: Deeper Transformation 

• Modern AI Models: Build engines that process data precisely and handle economic volatility.

• Rich Data Inputs: Use diverse, up-to-date data to support fair, accurate lending decisions.

• Skilled Governance: Maintain oversight with experienced teams to ensure alignment with credit policies.

❓Key Questions to Ask Before Automating

• Are our models missing key borrower signals or overemphasizing certain factors?

• Is explainability and fairness built into every decision path?

• How aligned are our credit policies with updated decision models?

Read The Full Article >

Wrapping Up

If these articles sparked your interest, we have a network that you will absolutely love: Forbes Finance Council.

This exclusive, vetted community brings together the brightest minds in finance—founders, CEOs, CFOs, and other finance team leaders.

Put yourself at the forefront of innovation with access to publishing opportunities on Forbes.com, a personalized, SEO-friendly Executive Profile, and the chance to network with other respected leaders in the field.

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