Cybersecurity threats to financial institutions are considered one of the biggest challenges in 2021.
Financial institutions are leading targets of cyberattacks. Banks are where the money is, and for cybercriminals, attacking banks offers multiple avenues for profit through extortion, theft, and fraud.
Moreover, security teams in the financial services sector are experiencing even more exacting demands as they defend their organizations in a world under a new and unexpected threat — a global pandemic.
In addition to that, cybercriminals have evolved in technology – enhancing their techniques and skills. This makes it very difficult for any financial service company to top the threat each time.
Banking industries hold a critical value in banking since banks make millions of transactions each day, and most of them are done on digital payment platforms. This makes the banking sector the primary target for cyber attackers all over the world.
Here are some of the biggest cybersecurity threats to financial institutions that they are facing today.
Web Application Attacks
From Google docs to calculator tools, webmail platforms to financial records, most of the applications we use today are hosted on the web. These applications are vulnerable to attacks because they are the most accessible and rely on user input.
Applications need to be accessed over Port 80 (HTTP) or Port 443 (HTTPS) to function. The types of web application attacks vary from unvalidated redirects and forwards to SQL injections. DDoS attacks, which we’ll go over in a minute, can fall into this category as well.
Identity theft is the practice of taking someone else’s financial or personal data without their knowledge with the motive of conducting concealed, illegal activities. When there is a privacy breach in a bank, the stolen information of the bank’s customers is usually sold and purchased on the dark web by illegal organizations and other cybercriminals.
DDoS, or a distributed denial-of-service (denial-of-service), attacks slow down websites by making them unavailable to users. These attacks go a long way to silencing websites that the hackers may disagree with, or disrupting business flow to a competitor.
DDoS attacks can be inexpensive ($150 buys a week-long DDoS attack on the darknet), and, therefore, prolific. 1/3 of network downtime incidents are attributed to DDoS attacks, costing businesses financial losses and reputation damages.
Supply chain risk
Often, financial institutions will have sophisticated security in place but rely on third-party vendors, such as cloud service providers, to manage the cost of compliance.
However, a breach on a third party can weaken the defenses of the finance organization as data is shared between the two. Any attack on the network – wider or other – can damage reputations and leave organizations subject to fines.
While banks are very careful about hiring employees, who will not steal from them, a major cybersecurity risk occurs from employee errors, not due to intentional wrongdoing. For example, employees may open a phishing email that installs viruses on the bank’s network. This was the most common type of cyberattack in 2016.
Given the COVID-19 pandemic and that many banking employees are working from home, simple employee errors and technological vulnerabilities may be subject to additional cybersecurity threats to financial institutions.
Third-Fourth-Fifth Party Vendors
Managing risk of third, fourth, and fifth-party vendors is a challenge. Though you may have strong protections in place in your own network, when you begin working with other vendors, you must also assess the cybersecurity threats to financial institutions of third-party agreements. If your partner is attacked by ransomware, these 3 questions come to you:
- How will that affect your bottom line?
- Will you be at risk, too?
- Who is responsible for protecting the network?
It’s cliché to say it at this point, but technology is always changing. Emerging technologies are useful, necessary, and provide competitive advantages to your institution.
In the finance sector, CIOs and CTOs are already considering how blockchain and the Internet of Things (IoT) can be leveraged to build growth. But these tools also bring additional risks. You can be confident hackers are ahead of you. They find ways to utilize blockchain and IoT for attacks. Just last year, the largest DDoS attack came via IoT.
There are so many opportunities to improve its cybersecurity threats to financial institutions despite these vulnerabilities. A common theme among the solutions though is finding the right technology and software to support your business.
From technical fixes to finding the right partners and third parties, it’s crucial to find solutions that:
- Support your business
- Secure your network
- Complement your aims for regulatory compliance