During the past two decades, the financial sector has borne the brunt of numerous cyberattacks. According to the IMF Global Financial Stability Report, approximately 20% of reported cyber incidents have impacted this industry, resulting in direct losses of $12 billion.
Since 2020, these direct losses have surged to around $2.5 billion, underscoring the escalating severity of cyber threats.
Verizon's 2024 Data Breach Investigations Report highlights the top cyberthreats facing the financial sector. They include:
- System intrusions: This remains the primary attack vector, indicating a shift towards more sophisticated and targeted attacks. Cybercriminals are employing advanced techniques to breach network defences and gain unauthorised access to sensitive systems.
- Social engineering: Exploiting human psychology, social engineering attacks, such as phishing and pretexting, continue to be a significant threat. By manipulating employees, attackers can bypass technical security controls and gain unauthorised access.
- Miscellaneous errors: Human error, such as misconfigurations, accidental data exposure, and weak password practices, remains a persistent security challenge. These errors can have severe consequences, particularly in a highly regulated industry like finance.
- Stolen credentials and ransomware: Cybercriminals often leverage stolen credentials to gain initial access to systems and then deploy ransomware to encrypt critical data, demanding a ransom for its decryption.
- Supply chain vulnerabilities: The recent MOVEit data breach highlighted the risks associated with third-party vendors and supply chain attacks. Compromised suppliers can provide attackers with a backdoor into an organisation's network.
Bolstering Cybersecurity Defences
To mitigate these threats, financial institutions must adopt a comprehensive cybersecurity strategy. Key measures within this strategy should include:
- Deploying strong authentication: Implementing multi-factor authentication (MFA) adds an extra layer of security by requiring users to provide multiple forms of identification, such as passwords, biometrics, or one-time codes.
- Undertaking regular training: Educating employees about cybersecurity best practices, including recognising phishing attempts, avoiding social engineering tactics, and practicing good password hygiene, is crucial.
- Using data encryption: Encrypting sensitive data both at rest and in transit helps protect it from unauthorised access, even if systems are compromised.
- Segmenting networks: Dividing the network into smaller segments can limit the potential impact of a security breach. By isolating critical systems, organisations can prevent attackers from spreading laterally.
- Undertaking regular software updates: Keeping software and operating systems up-to-date is essential to address vulnerabilities that could be exploited by cybercriminals.
- Creating an incident response plan: Having a well-defined incident response plan in place allows organisations to respond quickly and effectively to security incidents.
- Creating access controls: Implementing the principle of least privilege, which grants users only the necessary access to perform their job functions, can help mitigate the risk of unauthorised access.
- Undertaking comprehensive monitoring and logging: Using security information and event management (SIEM) tools to monitor network activity and log security events can help detect and respond to threats in real-time.
- Implementing third-party risk management: Assessing and managing the security risks associated with third-party vendors and partners is crucial, as a compromise in the supply chain can impact an entire organisation.
- Conducting regular security audits and penetration testing: Conducting regular security audits and penetration testing can identify vulnerabilities and weaknesses in security defences.
- Offering ongoing customer education: Educating customers about cybersecurity best practices, such as recognising phishing emails and protecting their personal information, can help reduce the risk of social engineering attacks.
- Undertaking incident simulation exercises: Regularly simulating cyberattacks can help organisations to test their incident response plans and identify areas for improvement.
Leveraging technology for enhanced security
To stay ahead of cyber threats, financial institutions should embrace advanced technologies. A unified security platform can consolidate various security tools into a single, integrated solution, simplifying management and providing a comprehensive view of the IT environment.
Automation can streamline security tasks, reducing the risk of human error and enabling faster response times to incidents. Artificial intelligence (AI) can be used to detect sophisticated threats and malware, protecting critical assets from emerging cyberattacks.
By implementing a robust cybersecurity strategy and leveraging advanced technologies, financial services companies can safeguard their sensitive data, protect their reputation, and ensure the trust of their customers.
