Advances in technology, especially over the last few years, have been revolutionary. Innovations like the internet, artificial intelligence, and cloud computing have massively changed how the world works. Almost all industries have adapted to these innovations, and it has undoubtedly made the world smaller and more accessible.
Nevertheless, these developments aren’t without their fair share of drawbacks.
Cybersecurity threats have become a pressing problem for most companies across different industries. Arguably, the industry most vulnerable is the financial and banking sector. In fact, in 2021, the banking industry saw a 1318% increase in ransomware attacks alone.
With the uncertainty of the pandemic, it is expected that cybersecurity threats within the financial sector will continue to rise. Knowing the enemy is half the battle won when it comes to these risks.
Top 8 Cybersecurity Threats to the Financial Sector
As mentioned earlier, instances of successful cybersecurity attacks are expected to rise in the next few years. The COVID-19 situation only exacerbates the trend. Different industries are vulnerable to a variety of threats. Listed below and the most common cybersecurity threats to the financial sector:
Ransomware attacks are malware attacks that encrypt a company’s digital assets. As the name suggests, this type of threat holds data or access for ransom until the operation adheres to the demands of the hacker. Victims of this type of cybersecurity risk are often locked out of their own systems and are rendered unable to access their documents. To date, ransomware attacks have become the most reported type of threat globally.
Web Application Attacks
Most applications that are used today are hosted online. From your calculator to your cloud-based storage, these applications are unsafe and can be easily accessed by malicious entities. There are various forms of web application attacks, but most of them rely on user input.
In general, a web application firewall is enough to prevent web application attacks on an operation’s system. It is also good practice to audit databases regularly to identify vulnerable points within the network.
Otherwise known as distributed denial of service, DDoS attacks aim to disrupt the website traffic of the targeted company. This type of threat can be used to shut down websites or slow down services to affect the flow of business. Essentially, through DDoS attacks, hackers send a barrage of bots to a website to crash the system from the inflow of users.
Phishing attacks are arguably the most “analog” form of cybersecurity threat. Most phishing attempts appeal to human emotion in order to gain access to sensitive information or a network as a whole. These attacks use social engineering to fool employees into performing tasks that render the system vulnerable to malware. Phishing email attacks have spiked in the last year – with most threats banking on the uncertainty of the COVID-19 pandemic to trick their victims.
It can be difficult for any type of company, financial or otherwise, to manage vendors beyond their network’s scope. While an operation can safeguard its in-house employees, most businesses do not have any control over their freelancers or contractors’ devices, applications, and connections.
Technology is ever-changing. Every year, new innovations revolutionize the banking industry. However, as mentioned earlier, these technologies carry plenty of risks. For instance, dealing with blockchain and incorporating the Internet of Things or IoT into your operation can be used by hackers to gain access to your current assets.
It is interesting how human emotions are still at the heart of most cybersecurity risks. Insider threats account for 60% of cybersecurity attacks. Hackers can be anyone within the company. From past employees to dissatisfied personnel, your staff can be your greatest threats or allies, especially when it comes to data breaches and security risks.
The pandemic saw a massive increase in companies allowing their employees to work remotely. While productivity and morale are at an all-time high, remote work leaves management unable to protect the company’s digital assets.
Importance of Cybersecurity to Financial and Banking Institutions
Protecting your company from cyber threats is no longer optional. Especially for financial institutions, the repercussions of a successful attack can gravely affect operations. Investments on multiple streams of cybersecurity precautions are well worth the expense:
- Prevents and Minimizes Financial Losses
Financial institutions are vulnerable to experiencing monetary losses amidst a data breach. Since we are talking on the scale of millions and billions, it can take a long time to recover from a successful cyberattack.
- Protects Customer Information
Customer loyalty is one of a bank’s most valuable assets. The ability of patrons to trust your institution is priceless. In the financial arena, reputation is everything. That said, one instance of a successful attack can derail an operation to the point of shutting down. Once customer data has been breached, it can be a challenge to mitigate the effects of this type of attack. Implementing continuous security monitoring promotes trust and manages reputation.
- Avoiding Penalties for Non-Compliance
Within the financial sector, several rules and regulations are in place that is designed to protect clients and their assets. Failing to comply with these guidelines can result in severe penalties. At present, various regulatory bodies are already imposing cybersecurity rules for financial companies.
A single instance of a successful attack on a bank can cost the operation upwards of $1.75 million. It comes as no surprise that most of the financial sector is willing to invest in their cybersecurity protocols to keep their assets safe from various risks and threats.
Do not let your business fall prey to hackers and malicious actors. In this day and age, having a singular line of defense is no longer enough to create strong forth around your operation. SecureBrain offers a slew of tried and tested cybersecurity solutions that can complement your existing protocols. Learn more about what we have to offer, and contact us today.