Interscale Content Hub – Cybersecurity for financial institutions is a big deal in today’s digital age. The financial sector is a big part of the global economy.
The 2024 CrowdStrike Global Threat Report says that the financial sector is still one of the most targeted industries. There was a 76% increase in victims of data theft extortion in 2023 compared to 2022.
These numbers show just how important it is to have strong cybersecurity measures in place to protect sensitive financial data and keep people confident in the financial system.
Scope of Cybersecurity in the Financial Sector
Cybersecurity in the financial sector is all about protecting financial institutions from cyber threats.
The McKinsey report, “The New Role of Cybersecurity in Financial Services,” says that as new technologies are adopted in the financial sector, new risks are introduced. To deal with these, cybersecurity measures are needed to mitigate the threats.
These activities include risk assessment and management. This involves identifying and evaluating potential cyber risks, and then implementing strategies to mitigate these risks.
Financial institutions need to regularly do risk assessments to understand their vulnerabilities and come up with comprehensive risk management strategies.
They should use advanced analytics and threat intelligence to stay ahead of potential threats.
Another important thing to think about is network security. This is about keeping the network infrastructure safe from unauthorized access and attacks.
This also means setting up firewalls, intrusion detection systems (IDS), and intrusion prevention systems (IPS) to keep an eye on and protect the network from any malicious activities.
As the McKinsey report points out, moving to cloud and edge computing means we need to make sure our networks are secure so that data can be moved safely beyond traditional on-premises environments.
Data protection is all about keeping sensitive financial data safe. This is done through encryption, access controls, and data loss prevention (DLP) solutions. These protect data at rest, in transit, and in use.
Incident response is about putting together and following a plan to deal with cyber incidents quickly and effectively.
An effective incident response plan should include procedures for detecting, analyzing, and mitigating cyber threats, as well as communicating with stakeholders and regulatory bodies.
The McKinsey report says that financial institutions need to step up their game when it comes to dealing with sophisticated cyber attacks.
Compliance is also important, meaning you have to stick to the rules set by regulators and industry standards so that you can have good cybersecurity practices.
Financial institutions have to stick to regulations like the Australian Prudential Regulation Authority (APRA) Prudential Standard CPS 234 on Information Security and the Critical Infrastructure Centre’s Security of Critical Infrastructure Act 2018, which require them to take really strong cybersecurity measures and report what they’re doing.
For a quick overview of what’s protected by cybersecurity, you can read “What’s the Deal with Active Directory? Here’s A No-Nonsense Explanation.”
Challenges Faced by Financial Institutions
The IT infrastructure is complex these days, with all those legacy systems and modern technologies. That makes it easier for cybercriminals to exploit any vulnerabilities.
The McKinsey report says that financial institutions have to deal with these complexities while making sure they stay secure and comply with the rules.
If you rely on third-party vendors for critical services, you’re more vulnerable if they don’t have good cybersecurity measures in place.
The McKinsey report says that many financial institutions are weak when it comes to managing their third parties and supply chains. This makes them vulnerable to cyber attacks through their vendors.
Another big challenge is regulatory compliance. Financial institutions have to navigate a complex landscape of regulatory requirements that vary a lot from region to region.
Compliance takes a lot of resources and requires constant monitoring to make sure you’re following the latest standards.
The McKinsey report says that regulatory compliance is a big reason why cybersecurity capabilities in the financial sector are getting more mature.
On top of that, there aren’t enough skilled cybersecurity professionals out there, which makes it tough for financial institutions to build and maintain strong cybersecurity teams.
The McKinsey report found that 65% of the institutions surveyed were worried about attracting and keeping the right cybersecurity talent.
This shortage of cybersecurity professionals can make it tough for institutions to implement and manage their cybersecurity measures effectively.
On top of that, the ever-changing threat landscape means that financial institutions have to stay on their toes and keep adapting their cybersecurity strategies.
The CrowdStrike 2024 Global Threat Report shows that cybercriminals are getting faster and more sophisticated.
There was a 75% increase in cloud intrusions and a 76% increase in data-theft extortion cases in 2023.
Common Cyber Threats to Financial Institutions
Phishing and Social Engineering Attacks
Phishing and social engineering attacks are ways of getting people to give up sensitive information or do things that make it easier for hackers to get in.
These attacks can take different forms, like deceptive emails, phone calls, or messages that come from legitimate sources.
Let’s say a major bank got hit by a phishing attack. Employees got emails from what looked like the IT department, asking for password resets.
Some employees gave in, which let someone access the bank’s internal systems without permission.
Malware and Ransomware
Malware and ransomware are basically malicious software designed to get into your system, steal your data, or mess with your operations.
Ransomware, in particular, encrypts data and asks for money to get it back.
The WannaCry ransomware attack in 2017 hit a lot of institutions around the world, causing a lot of operational disruptions and financial losses.
Distributed Denial of Service (DDoS) Attacks
DDoS attacks are when a network or website gets flooded with so much traffic that it becomes unavailable to legitimate users.
These attacks can cause a lot of downtime and financial losses.
In 2012, a major U.S. bank had its online banking services disrupted for several days due to a DDoS attack. This affected millions of customers.
Insider Threats
Insider threats are when employees or other trusted individuals with access to an organization’s systems and data do something bad on purpose. These threats can be intentional or unintentional.
Just as an example, a former employee of your company was found to have stolen sensitive customer data and sold it to identity thieves.
Advanced Persistent Threats (APTs)
APTs are long-lasting and targeted cyber attacks where someone gets into a network and stays there for a long time without being noticed. These attacks are all about stealing data or disrupting operations.
For instance, in mid-2018, the Bitdefender team looked into a targeted attack on an Eastern European financial institution by the infamous Carbanak group.
Just look at what a lack of cybersecurity can do to your company in “Preventing Data Breaches is Cheaper Than Paying $4.45 Million, Right?!“
Best Practices for Financial Institutions
To keep their data safe and protect themselves against cyber threats, financial institutions should follow a few simple best practices.
First and foremost, you’ve got to do regular risk assessments. This process is all about keeping an eye on cyber risks and making sure that risk management strategies are up to date.
Another essential practice is implementing strong access controls. This means making sure that only the right people have access to sensitive data and systems.
Multi-factor authentication (MFA) and privileged access management (PAM) are key parts of this approach. PAM is really important for protecting high-risk access points in an organization’s infrastructure.
To beef up your network security, you’ll want to set up some solid defenses, like firewalls, intrusion detection systems (IDS), and intrusion prevention systems (IPS). These tools help keep people out who shouldn’t be in and stop attacks.
Financial institutions also need to make sure they’re secure in the cloud. This means managing configurations, enabling logging and monitoring, and controlling access through role-based access control (RBAC) and MFA.
You’ve got to keep your systems up to date and apply the latest patches to protect against known vulnerabilities. Outdated systems can be a big security risk, especially when you consider how quickly cyber threats are evolving.
One thing that’s so important in this area is to educate and train employees on cybersecurity. Training and awareness programs help employees recognize and respond to cyber threats effectively.
Having a plan in place to deal with incidents quickly and effectively means that financial institutions can respond to cyber threats in an organized way.
Running regular drills and making sure your response strategies are up to date based on real-world scenarios is a great way to improve your overall readiness.
Monitoring and auditing systems are great for keeping an eye on things and being able to spot any suspicious activity.
It’s a good idea to aggregate logs in a Security Information and Event Management (SIEM) system to get a comprehensive overview.
Also important is strengthening third-party risk management. Financial institutions should make sure that their third-party vendors are keeping up with the latest cybersecurity standards.
The complexity and interconnectedness of modern financial ecosystems mean that a breach in a third-party system can have a big impact.
How Interscale Can Be Your Supporting System in Cybersecurity
As you can see, the article is quite lengthy. The reason is simple: there’s a lot of theory, case studies, and practical action to understand.
Cybersecurity in financial institutions is pretty complex. So, different cybersecurity roles require experience, an understanding of theory, and the ability to understand trends.
That’s why we at Interscale offer a full range of cybersecurity services designed to meet the specific needs of financial institutions.
The Interscale team of experienced cybersecurity pros can help you with security assessments, vulnerability management, incident response, and employee training.
Of course, we have lots of tools with a team of experts to help you navigate the complexities of cyber security.
But what we really want you to know is you are our main focus.
That’s why we would appreciate it if you could take a look at our capabilities on the Interscale Cyber Security page.
We’re also open to doing a one-on-one discussion session if you’d like. Feel free to book a time that works for you. We’re all set for you here.
Conclusion
Cybersecurity is a constant challenge for financial institutions, so it’s important to take a proactive and comprehensive approach.
Staying informed and putting together a solid cybersecurity strategy will help financial institutions keep their operations safe and customers confident in an increasingly digital world.
Partnering with a reliable company like Interscale can provide the know-how and support you need to navigate the complex and ever-changing cyber landscape.
Just a reminder: The cost of a data breach is way more than the investment in cybersecurity. This really drives home the point about the importance of having rock-solid cybersecurity for financial institutions.
