The financial services industry is a prime target for cyberattacks due to the vast amounts of sensitive financial and personal data it handles. Cybercriminals are motivated by financial gain and aim to exploit vulnerabilities within the industry to steal money, commit fraud, or engage in other malicious activities.
In fact, according to our partner, Maxxure Cyber Risk Management, there has been a 1,300% increase in ransomware attacks in recent years in the financial industry. At the same time, there were 10,000+ phishing domains to impersonate financial institutions that were recorded last year, which remains the most prevalent form of cyberattack for the financial services industry. Of these organizations, 80% encountered at least one breach related to weak authentication, while 71% of organizations were victims of payment fraud attacks or attempts. Maxxsure has also discovered that 79% of IT professionals believe that the banking sector is a soft target for darknet operators.
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What to Protect Your Organization Against
Considering these facts, how can a financial institution protect itself from cyber attacks? It starts from knowing what kind of attacks criminals are doing. Here are some common types of cyberattacks on the financial services industry:
1. Identity Theft: Stolen personal and financial data can be used to commit identity theft, including opening fraudulent accounts or applying for loans in someone else’s name.
2. Social Engineering: Cybercriminals use psychological manipulation to deceive employees or customers into divulging sensitive information or performing actions that compromise security.
3. Insider Trading: Insider trading can involve employees or individuals with insider information using it to make illegal stock or investment decisions for personal gain.
4. Malware: Malicious software, such as Trojans and keyloggers, can infect systems and compromise data. Malware can be introduced through phishing emails, malicious downloads, or compromised websites.
5. ATM Skimming: Criminals place skimming devices on ATMs to capture card information and PINs, which they use for fraudulent transactions. More advanced skimming devices can transmit data wirelessly.
6. Advanced Persistent Threats (APTs): APTs are sophisticated and targeted attacks by well-funded groups or nation-state actors. They often involve prolonged efforts to infiltrate and compromise a financial institution’s network.
7. Insider Threats: Employees with access to sensitive data can pose a significant threat. Malicious insiders may steal data, commit fraud, or manipulate systems. It’s important for financial institutions to have robust monitoring and access controls in place.
8. DDoS Attacks: Distributed Denial of Service (DDoS) attacks overwhelm a financial institution’s online systems, rendering them temporarily unavailable to customers. These attacks can disrupt services and create opportunities for other attacks.
9. Ransomware: Ransomware attacks involve encrypting a financial institution’s data and demanding a ransom for its release. Attackers can disrupt operations, damage a company’s reputation, and potentially steal sensitive data during these attacks.
10. Phishing Attacks: Phishing emails and websites are used to trick individuals into divulging their login credentials, personal information, or financial data. Phishing emails may appear to come from a legitimate financial institution, but they lead to fake websites designed to steal information.
Cyber threats to the financial system are growing, and the global community must cooperate to protect it. Financial institutions must employ robust cybersecurity measures to protect against these threats, including encryption, multi-factor authentication, intrusion detection systems, security awareness training, and regular security audits.
There are regulatory bodies, such as the Financial Industry Regulatory Authority (FINRA) and the Securities and Exchange Commission (SEC), that have specific cybersecurity guidelines that financial firms can and must follow. In February 2020, Christine Lagarde, president of the European Central Bank and former head of the International Monetary Fund, warned that a cyberattack could trigger a serious financial crisis. It’s crucial for financial institutions to take the first step in protecting their organizations by following guidelines, at the least.
Protect the Future of the Financial Services Industry
In the evolving landscape of cybersecurity, staying vigilant and continually adapting to new threats is essential for the financial services industry. Collaboration with law enforcement and sharing threat intelligence within the industry is also crucial to combat cyberattacks effectively.
References:
https://www.statista.com/topics/9918/cyber-crime-and-the-financial-industry-in-the-united-states/
