Cybercriminals grow both in number and sophistication. Nowadays, every business is a potential victim of cybercrime. Cyber attackers generally target based on two parameters: maximum revenue and maximum impact. With accumulating data on global cybercrime, the financial services industry has gained the position as a preferred target by cybercriminals.
Organizations in the financial sector — including banks — maintain highly critical and valuable data electronically, ranging from credit cards to deposit details. The complicated regulatory environment, the intricate supply chain ecosystem, and the hybrid workplace practices triggered by COVID-19 are giving enough opportunities for cybercriminals to exploit.
Phishing Attacks
Phishing is a way of tricking users into revealing login credentials to gain access to an internal network. Email phishing is the most common type; an email appearing as legitimate communication is sent to victims. Nowadays, phishing is a big business — letting criminals utilize Phishing-as-a-Service (PhaaS) through hosted solutions. PhaaS comprises products ranging from single toolkits to fully orchestrated campaigns.
According to a recent report, almost 50% of observed phishing attacks were associated with the financial services sector — making banks and financial institutions the single most targeted industry for phishing-based intrusions.
Ransomware Attacks
Ransomware is another major cyber risk to financial services. It is a form of malware that prevents users from accessing their system or data and threatens to publish or sell the stolen data unless a ransom is paid. As per a recent report, the banking industry faced a 1,318% rise in ransomware attacks in 2021.
Besides encryption and data exfiltration, cybercriminals use other extortion methods including threatening to hinder operations with DDoS attacks. Attackers generate attack traffic from several compromised computer systems, crashing websites by overloading them with traffic. As a consequence, ransomware attacks have a substantial impact on financial firms: downtime, reputational loss, revenue loss, and public release of sensitive data.
Artificial Intelligence as a Double-Edged Sword
Artificial Intelligence can be a double-edged sword. Though financial institutions widely use AI technologies that help in the fight for cybersecurity, AI can also help criminals who attempt to attack financial institutions. Cybercriminals utilize AI to enhance the effectiveness of their attacks — understanding patterns in human behavior, identifying optimal attack windows, and generating more convincing phishing content at scale.
Advanced Persistent Threats (APTs)
Because of the sensitive nature of the data, Advanced Persistent Threats (APTs) are a massive threat to banking systems and financial firms. These actors gain access to a computer network and are not detected for a prolonged period — during which they mine highly sensitive data. APT actors make use of many of the same attack strategies as less capable threat actors, including phishing and ransomware, but they do it with more technical competency and funding.
Insider Threats
With regard to insiders, front-line staff and customers act as the biggest cybersecurity concerns for financial services. Remote access and cloud-driven services — while beneficial for productivity — work in favor of insider threats. Though in several cases staff threats are accidental, the consequences are damaging to financial sectors' reputation and revenue.
State-Sponsored Cyberattacks
The invasion of Ukraine highlights the present danger of state-sponsored cyberattacks that have the objective of disrupting and disabling IT systems. The financial industry is the most targeted sector by these groups — specifically in the form of ransomware attacks and APTs. IT outages, cyberattacks, or service disruptions can lead to hefty operating expenses through consultancy costs, customer redress, and regulatory penalties.
Ways Financial Institutions Can Respond
Implement a Cyber Risk Management Framework
Financial institutions can handle cybersecurity risk with a sound cyber risk management framework. Tried-and-tested frameworks include the NIST Cybersecurity Framework — a powerful tool to organize and enhance cybersecurity programs through a set of guidelines and practices.
ISO 27001 Information Security Management
ISO 27001 was formed to "provide a model for establishing, implementing, operating, monitoring, reviewing, maintaining and improving an information security management system" — providing a globally recognized foundation for financial sector security governance.
Continuous Security Monitoring
Financial institutions manage huge amounts of data and face a rapidly growing attack surface due to enterprise apps, shadow IT, remote work, and IoT adoption. Continuous security monitoring should take place across all attack surface dimensions — vulnerabilities in mobile application code, misconfigured software, unpatched systems, and anomalous access patterns.
Third-Party Risk Management
Banks generally must grant third parties access to sensitive data, essential systems, and other major resources. Hackers may target your subcontractors to gain access to your essential systems. Third-party risk management should be an essential element of the cybersecurity policy — identifying and mitigating security risks caused by vendors, partners, and suppliers.
Employee Training and Awareness
Human errors can lead to cybersecurity breaches in the financial sector. Building a workforce that is well-equipped in cybersecurity practices — and encouraging employees to report concerns immediately — is a critical and cost-effective layer of defense.
Investment in Technology and Expertise
IT and security leaders in financial services must invest in the appropriate combination of technology and expertise to combat cyber risks. Cybersecurity is comprehensive, and a continuous security control posture can substantially and rapidly enhance a company's security position — reducing both the likelihood and severity of successful attacks.