There are a multitude of cybersecurity technologies in use in the financial services sector. These include firewalls, SIEM, UEBA, and data encryption to name just a few. Financial services organizations face unique and heightened risks in terms of cybersecurity. This is because of the sensitive consumer data that they possess and the potentially devastating effects of a breach for their clients. Finserv organizations have bolstered their defenses. However, they still remain a vulnerable target for hackers.
According to a survey of IT executives, 66 percent of financial organizations experienced at least one cyberattack in 2016. What’s more, the threat is by no means shrinking. This is clearly indicated by the massive 2017 Equifax data breach that exposed the personal information of more than 143 million U.S. consumers.
From ransomware to phishing attacks, the financial services industry faces a range of serious threats. Let’s dive into a discussion of the biggest threats listed below.
Although you may think you’re doing everything right by complying with cybersecurity regulations for the financial industry, regulatory compliance alone may not be enough to keep your organization secure. While compliance regulations can certainly have positive benefits, they can sometimes be incomplete, conflicting, short-sighted and reactionary. If not updated regularly, you run the risk of using a 20th-century regulatory framework to address cutting-edge internet and technology issues.
What’s more, different countries each have their own rules that don’t apply across borders, which may create future problems. According to Constance Bommelaer de Leusse, senior director of global internet policy at the Internet Society, “Policymaking that is reactive and not long-term may fragment the Internet along nation-state boundaries and also undermine human rights.”
A lot of different threat-actors stand to benefit from launching a cyber attack against financial services companies. This includes not only lone wolves out for monetary gain but also foreign governments attempting to destabilize a country. These foreign governments target banks, stock exchanges and other pillars of the economy.
In 2016, NATO officially defined cyberspace as the fifth domain of warfare, recognizing the critical role that countries’ IT infrastructure plays in their existence. With nations such as Russia and China employing their own quasi-governmental teams of hackers, the cyber attacks launched against U.S. companies of all sizes and industries have never been more sophisticated.
Despite advanced techniques that malicious actors use to infiltrate an organization’s network, far too many digital break-ins are attributed to simple employee errors and lapses in judgment. For example, phishing, a social engineering technique used to deceive users with fake emails and messaging, was the most common type of cyberattack in 2016.
The causes of employee error are diverse, which means that eliminating it from your organization is a challenging task. Often, staff don’t receive sufficient training on how to recognize and avoid cyber attacks, making them more susceptible to deception. Other employees neglect to follow proper IT security procedures, and some even engage in malicious behavior by exfiltrating data themselves.
Also, you cannot discount the threat of “shadow IT.” This primarily concerns organizations that do not have a strong, enforceable BYOD (bring your own device) policy. Because these devices aren’t controlled or managed by the IT department, they present a much greater security risk. The fact that these devices have “anytime, anywhere” connectivity — which includes making unsafe connections — is especially dangerous.
Companies that use third-party vendors inherently increase their risk of being breached because they are more exposed to vulnerabilities. For example, the 2014 breach of retail giant Target, which resulted in an $18.5 million settlement, occurred after attackers gained access to the network using valid credentials stolen from a third-party vendor.
Of course, the more system entry points you have, the more opportunities that hackers have to enter. What’s more, many third-party vendors have their own IT security platforms and configurations that are outside of your control, making it harder to lock down your network.
Problems with third-party vendors can be the result of inequalities in the relationship. Large corporations have more resources and capital to devote to cybersecurity measures and often use multiple third-party vendors. Meanwhile, the vendors themselves are usually smaller companies with less knowledge of cybersecurity and fewer resources to devote to it.
As technology continues to advance and the methods of threat actors continue to evolve, new challenges and risks will inevitably arise. In response, organizations will need to take new approaches to IT security and compliance in order to avoid falling victim to unexpected avenues of attack.
For example, the emergence of artificial intelligence and machine learning is both a blessing and a curse for financial services companies. AI techniques can make malicious actors’ jobs easier during an attack. However, they also help security teams to identify potential threats more quickly and efficiently. The growth of IoT (the Internet of Things), another major tech trend, increases the number of potential attack surfaces by an order of magnitude.
The combination of these five threats makes securing financial services IT environments particularly challenging. Fortunately, there are solutions that almost any organization can easily adopt. Encrypting your data ensures that even if you fall victim to a cyber attack, your customers’ sensitive information will remain inaccessible to malicious actors.
Learn more about how you can safeguard your business with the power of data encryption.