Cyber isn’t just IT’s problem anymore — it’s a financial risk

For years, cybersecurity was seen as a technology issue — something owned and managed by the IT department. But in today’s business landscape, that mindset is not only outdated, it’s dangerous.

Cyber risk is now a direct threat to your company’s balance sheet, valuation, continuity and reputation. It impacts everything from cash flow and insurance premiums to client retention and regulatory exposure.

If you’re in finance, operations or executive leadership and still thinking of cyber as “IT’s problem,” you may be ignoring your company’s biggest financial risk.

The risk has changed — and so have the consequences

Cyber incidents are no longer rare events targeting global enterprises. Mid-market companies are squarely in the crosshairs — often because they have valuable data, financial assets and vendor relationships, but fewer security resources.

What used to be an inconvenience can now harm a company. Consider the impact of:

• Ransomware that freezes access to critical systems or demands seven-figure payouts.
• Business email compromise that results in fraudulent wire transfers or vendor impersonation.
• Data breaches that expose sensitive customer or employee information, leading to lawsuits or fines.
• Operational downtime that halts production, shipments or service delivery for days.

These aren’t theoretical risks. They’re balance sheet events. And in a climate of economic uncertainty, tight margins and investor scrutiny, the cost of being unprepared is rising fast.

Cybersecurity isn’t just an expense — it’s a financial risk control

Leaders wouldn’t hesitate to invest in insurance, legal review or financial audits to manage enterprise risk. Cybersecurity needs to be viewed through the same lens — not as a tech toolset, but as a risk mitigation strategy.

In fact, some of the biggest financial impacts from cyber events stem from areas far outside IT:

• Legal settlements and regulatory fines
• Revenue loss from system outages or reputational damage
• Executive time diverted to crisis management
• Customer churn and contract termination
• Loan covenant breaches due to delayed reporting
• Valuation impacts in M&A due diligence

If cyber is excluded from enterprise risk and business continuity planning, the exposure is real — and so is the cost.

Why finance leaders need a seat at the cybersecurity table

Cybersecurity has financial implications at every stage of a business — yet many CFOs, controllers and finance leaders aren’t engaged in cyber discussions until something goes wrong.

That’s a problem.

Finance should be involved in:

• Budgeting for cybersecurity investments, not just in tools, but in operationalizing, training, backup and recovery.
• Modeling the financial impact of a breach, including loss scenarios and insurance gaps.
• Evaluating risk appetite and tolerance, just like with credit, operational or supply chain risk.
• Driving metrics and reporting that tie cyber posture to business performance.
• Participating in build versus outsource analysis to help ensure cybersecurity strategy aligns with cost, capability and risk tolerance.

In short: Cybersecurity is now part of financial stewardship. The numbers don’t live in silos anymore — and neither should the decisions.

The CFO-CIO disconnect is putting businesses at risk

Too often, cybersecurity conversations get lost in translation between technical teams and executive leadership. CIOs or IT directors may advocate for infrastructure upgrades or risk assessments — but without framing those needs in terms of business outcomes, they struggle to gain traction.

Meanwhile, CFOs and COOs are juggling inflation, staffing challenges and margin pressure — and cybersecurity sounds like a cost center, not a business enabler.

Bridging this gap is essential.

CFOs don’t need to be cybersecurity experts — but they do need to understand:

• What data and systems are most critical to operations and cash flow.
• Where the business is most vulnerable (e.g., remote access, vendor portals, financial processes).
• What risk scenarios have been modeled — and what response plans exist.
• How long it would take to recover from a breach — and how much it would cost.
• What compliance and regulatory requirements apply — whether industry-specific or tied to individual client contracts.

When cybersecurity is aligned with financial planning and operational strategy, businesses can move from reactive to resilient.

Cyber risk is increasingly a board and M&A issue

Whether you’re preparing for an audit, financing event or transaction, cybersecurity posture is now part of the due diligence checklist.

Buyers and investors want to see:

• Documented cyber policies and incident response plans.
• System access controls and data protection protocols.
• Training programs for phishing and social engineering.
• Business continuity and incident response plans that include cyber scenarios.
• Insurance coverage with adequate limits and response timelines.
• Compliance with applicable regulations (e.g. PCI, CMMC, HIPAA).

If those aren’t in place — or if the seller can’t speak confidently to them — deals slow down, discounts appear or buyers walk away.

In other words, cyber risk isn’t just operational. It’s reputational, financial and strategic. And in a deal-driven market, readiness creates leverage.

Cyber insurance is harder to get — and more expensive

Once considered an easy backstop, cyber insurance has become more selective. Premiums are up. Applications are longer. And coverage may be limited or denied if the business can’t demonstrate basic security controls.

Finance leaders need to treat cyber insurance like any other coverage:

• Understand what is and isn’t covered.
• Work with IT to meet minimum security requirements.
• Factor in retention amounts and incident response obligations.
• Claims may also be denied if the company misrepresented its controls on the application.
• Review policies annually as risk profiles evolve.

Cyber insurance isn’t a solution — it’s a tool. And like any risk transfer mechanism, it only works if the groundwork is in place.

What you should be doing now — even if you think you're in good shape

Here’s a simple starting point for business and finance leaders who want to take a more active role in managing cyber risk:

1. Identify your financial crown jewels: What systems or data, if compromised, would create the biggest financial disruption? Prioritize visibility and protection around these areas first. To gauge how exposed they are, consider penetration testing and attack simulations — these exercises help assess both likelihood and severity of a breach.
2. Pressure-test your incident response plan: If you were hit with a ransomware attack tomorrow, who does what? How fast can you respond? Have you run a tabletop exercise with leadership? These drills reveal gaps in communication, coordination and recovery speed — all of which affect your bottom line.
3. Quantify the risk in real dollars: Work with your IT and insurance partners to estimate the cost of different cyber scenarios — including downtime, recovery and lost business. Then, commit to a continuous improvement cycle by developing actionable mitigation plans that reduce risk to acceptable levels.
4. Align cybersecurity with enterprise risk: Cyber should sit on the same dashboard as supply chain, credit and compliance risk. Integrate it into your enterprise risk management framework and planning cycles — and ensure risk tolerances are reviewed by leadership, not just IT.
5. Make cyber hygiene a leadership responsibility: Cybersecurity isn't just a tech checklist. It's a business behavior. Lead by example on access controls, phishing response and software compliance. Just like reviewing cash flow or profitability, define key metrics and create dashboards to track and report on the health of your cyber program over time.

Visibility is the first step to control

You can’t control what you don’t understand — and for many business leaders, cybersecurity is still a black box. That lack of visibility creates vulnerability. Not just for systems and data, but for cash flow, reputation and business continuity.

In uncertain times, resilience is a competitive advantage. That means knowing your exposure, testing your response and investing where it counts.

At Wipfli, we help mid-market businesses close the gap between cyber awareness and action — integrating cybersecurity into enterprise strategy, financial planning and operational continuity. If you're unsure where your trouble spots are, now’s the time to find out. Learn more about how we can help our clients manage risk on our risk advisory and cybersecurity pages.

Interested in learning more about how we’re helping clients in today’s era of uncertainty? Visit our resource hub for mid-market leaders.