Running Rampant: Exposing Cybersecurity Challenges Affecting the Banking Industry
Cybersecurity attacks are evolving, becoming more sophisticated, more frequent, and much more widespread, leading to elevated operational risks to banks and financial firms as a whole.
Not a day goes by without an organization suffering a data breach or a customer of a bank losing money from the account through stolen credentials. Ongoing digital transformation, rising customer expectations, and changing business models in the financial sector continues to fuel insurmountable challenges operating a secure environment.
While most industries worldwide are affected by the imminence of cybersecurity threats, the banking industry continues to sit firmly in the crosshairs. It’s not surprising since this sector deals with what the attackers want the most, money and personal information. Hackers are continually finding ways to target and effectively penetrate exploitable security vulnerabilities, further evidence that cybersecurity attacks are increasing rapidly year over year. And it’s not expected to slow down.
Cyber-Attacks: A Booming Business
Cyber-attacks on financial firms have become a flourishing money-making business for cybercriminals. A report from a cybersecurity firm’s research indicates cyber-attacks against banks spiked by a massive 238% from the beginning of February to the end of April 2020.
In 2021, financial firms saw the highest volume of cybersecurity attacks over any other industry. This threat landscape is widening as it is getting more sophisticated and diverse. The average cost of a data breach in the financial sector in 2021 was $5.21 million, according to reports from IBM & Ponemon Institute. In 2021 alone, the banking industry experienced an increase of 1,318% in ransomware attacks.
As fast as organizations are adopting new-age technologies, hackers are constantly finding ways to penetrate and target exploitable security vulnerabilities. Thus, making it evident that cybersecurity attacks are increasing rapidly every passing year.
Cybersecurity attacks continue to make the headlines, and 2021 was no exception for the banking industry. Large financial institutions like Automatic Funds Transfer Services, Flagstar & CNA Financial were among a slew of financial business hit. Some of the most headline-making cyber-attacks have been the DDoS attacks. These attacks flood customer-facing bank websites with traffic and take them offline or attacks on the Swift based money transfer systems, among others.
What Does This Mean for Small-Mid-Sized Financial Firms?
The continue onslaught of cyber-attacks on larger financial firms begs the question for smaller firms. If larger financial businesses with a multitude of resources to protect data are continually being hit, how is a smaller firm supposed to protect business data with limited resources & infrastructure in place? Cybercriminals understand that expertise & resources pose a difficult challenge for smaller financial firms & are willing to target them as low-hanging fruit. It’s less work for the cybercriminal to gain access to a smaller firm that isn’t properly structured & has not made any time or resource investments in cybersecurity to protect their business. The smaller firms present a golden opportunity for cybercriminals to make a steady profit from stealing confidential information & collecting a ransom, once they’ve threatened to release the stolen data on the dark web, as an example.
Protecting Critical Assets
Not only do banks store money, but also gather network activities and personal information of the customers. Information that includes names, phone numbers, addresses, email addresses, and dates of birth. This data has inherent value and can be used for other malicious activities such as identity theft, which can often lead to more disastrous consequences to the bank & the customers themselves. Cybercriminals are relying on advanced with modern technologies, often more modern than some smaller financial institutions. They develop custom-built malicious code that is routinely missed by antivirus protection alone. Addressing the need for stronger protection in the financial sector as whole, is essential to thwarting the next attack.
The banking industry should be cognizant of the assets they have stored and what mechanisms might be used by attackers to get into their organization. Identifying the weak points and the measures needed to strengthen the IT infrastructure, based on the risk assessment, to defend against those potential threats is necessary in building an optimized cybersecurity program. This critical shift from passive cybersecurity to defensive cybersecurity is necessary for financial organizations. This redirected mindset & approach puts financial organizations in the driver’s seat, tackling cyber threats in a proactive manner. It’s not a time to embrace the hacker to test the strength of IT security. At that point, it could be too late.
While focusing on the security of systems is imperative, it’s important to concentrate on enlisting employees as your first line of defense in preventing hackers from reaching your network. Employees that are taking the necessary steps to defend the perimeter is a crucial piece of overall cybersecurity. This requires ongoing awareness training that includes approaches hackers take to find their way in & what can be done to minimize risk exposure to the business.
Basic Steps to Minimize Your Risk
To be honest, financial firms, or any business, for that matter, should avoid relying on the obsolete IT infrastructure. Instead, adopting cybersecurity measures that are more complex and sophisticated than ever before to prevent emerging cyber threats.
Here are some basic steps the financial firms can implement to minimize the risk of a cyber-attack:
- Employee security training: All employees should be aware of the threats and consequences of ignoring them. For instance, they should be aware of the consequences that can arise by clicking a malicious link or opening an attachment from an unknown person. Providing ongoing security awareness training is integral in preventing cyber-attacks. It is particularly important because 95% of cyber incidents are the result of human error.
- Locate & categorize assets: It is important to identify and categorize the information assets, based on its level of sensitivity, value, and criticality to the bank. Information assets including various categories of restricted data, confidential, internal use, and the public.
- Conduct regular risk assessments: It is recommended for every bank to prepare a cybersecurity risk assessment, and implement a cybersecurity protection plan to address those threats identified in the risk assessment process. This helps the organization to eliminate the factors that cause disruption in running a smooth business operation.
- Document threats & vulnerabilities: Threat and vulnerability can be subjected to a person, an organization, weaknesses in the system or the network. It is recommended for many banking institutions to identify these threats and vulnerabilities through penetration testing in order to patch the weaknesses that can be exploited to gain access and infiltrate the system.
- Consistently study risks from assessments: Banks have access to the assets that the hackers want. Regularly analyzing the risk to these assets based on the impact or criticality to the organization and customers is smart decision, and a solid method in identifying any new threats.
Your Best Line of CyberDefense
When it comes to cybersecurity, your best line of defense is one that is comprehensive, follows the NIST framework & addresses your security needs now & in the future. Rather than addressing cyber threats singularly, a largely reactive response, a holistic approach to data protection will ensure that your IT environment is receiving the maximum protection 24/7/365, always on, always ready.
Financial institutions are the backbone of our economic infrastructure & are constantly bombarded with threats by cybercriminals. It’s important that our financial system is prepared to take on the challenge of protecting confidential data with a sound investment in organizational cybersecurity posture to ensure the safety & continued operation of our financial ecosystem. Certainly not a challenge to be taken lightly, but know that you have a complete solution, backed by the industry’s best cybersecurity tools & resources, to defend your sensitive data every single day.
If you’re concerned that your IT environment has holes that hackers can weave their way into critical data, take a no-cost, online self-assessment gauge that will show you where your weaknesses are. Use this information to prioritize the most serious gaps & plan to address those first. If you have questions about how to go about prioritizing security needs, we are here to answer your questions. If you don’t have a tested response & recovery plan in the event of an attack, we can help you develop plans that protect your environment in the event of a disaster. And of course, if you’ve been hit by a cyber-attack, we are available to assist you in incident response recovering or restoring your systems.
For more educational resources on cybersecurity in the financial industry, visit our educational resources page.