The finance sector, with its vast wealth of sensitive information and transactional data, stands as a prime target for cybercriminals and data loss. Digital advancements present both risks and opportunities to this industry and, with legislation including DORA coming into play for all European financial institutions, identifying and mitigating risks is key.
Here are five of the biggest security risks in the finance sector so you can take action to fortify your defenses where it matters most:
1. Phishing attacks: The gateway to greater risks
Phishing remains a significant threat, with the Anti-Phishing Working Group (APWG) reporting over 1,624,144 phishing attacks in the first quarter of 2023 alone - the worst quarter ever observed.
In the finance sector, these attacks are particularly dangerous, often serving as the entry point for more sophisticated threats. Successful phishing attacks can lead to unauthorized access to internal systems, resulting in substantial financial losses. At a large multinational company, a finance employee was recently tricked into paying out $25 million to fraudsters using deepfake technology to pose as the company’s chief financial officer in a video conference call.
Technology and those using it for malicious purposes are getting smarter. Handlers of sensitive financial data must take action to bolster defenses through greater awareness of how to identify and prevent threats.
2. Human error: The elephant in the room
In stark contrast to the malicious actor is the well-meaning employee. Human error is an often underestimated but significant risk, responsible for approximately 80% of data breaches according to reports from European privacy authorities, such as the UK ICO and Dutch AP.
Simple mistakes, such as sending emails containing sensitive data to the wrong recipient, with the wrong content and/or with poor security measures, can have dire consequences. In the UK, ‘data emailed to incorrect recipients’ alone is responsible for 16% of all reported security incidents in 2023.
This is one particular risk that can be prevented today - with the right tools. Tech is growing smarter; integrated solutions can support busy employees to avoid making mistakes, delivering in-the-moment advice to prevent potential errors.
3. Insufficient security measures: An open invitation for cyber attacks
Insufficient security measures leave the finance sector vulnerable to a wide array of attacks, whether malicious or unintentional. The cost of a data breach in the finance industry averaged $5 million in 2023 - significantly higher than the global average across most industries.
Exacerbated by the increasing sophistication of cyber attacks, it has never been more important for security leaders to review their security posture. Compliance, customer trust and corporate reputation are of the utmost importance for financial organizations. Laying robust, sustainable cybersecurity foundations based around continuous monitoring and collaborative efforts should see an organization-wide security minded culture, key to preventing data loss events.
4. Insider threats: The invisible elephant in the room
Insider threats, both malicious and unintentional, present a complex challenge. According to the 2020 Insider Threat Report by Cybersecurity Insiders, 68% of organizations feel moderately to extremely vulnerable to insider threats. These can range from employees inadvertently leaking data, to deliberate sabotage or theft of sensitive information. The consequences can be severe, with insider incidents often going undetected for months, if not longer, leading to substantial financial and reputational damage.
Similarly to human error, the best course of action is awareness. Historically, we have seen organizations take a finger-pointing approach towards data loss incidents and, while this seems appropriate for malicious activities on the part of employees, it can instigate a culture of fear for well-meaning employees. Empowering employees to recognise potential threats through better awareness and the use of smart tools is a more sustainable approach to preventing internal incidents.
5. Compliance violations: A costly (and avoidable) oversight
The finance sector is heavily regulated, and non-compliance with data protection and privacy laws can lead to hefty fines and legal repercussions. In recent years, regulatory bodies have intensified their scrutiny, imposing fines on institutions for failing to adhere to compliance standards. For instance, in 2023, regulators fined Wall Street firms $549 million for using WhatsApp and other channels to discuss business, highlighting the costly implications of compliance violations.
Ensuring the tools used to transport data both inside and outside of the organization are designed to meet compliance with data protection regulations is one step in the right direction. Your providers may say all the right things but does your tech meet DORA, GDPR, and NIS2?
Tackling your biggest security threats
The finance sector's cybersecurity landscape is fraught with challenges, from phishing attacks and human error to insufficient security measures, insider threats, and compliance violations.
Most of these threats are harbored in communication platforms, the tools finance professionals use to engage with clients and share sensitive data - predominantly email.
Addressing these issues requires a multifaceted approach:
- Investment in robust security technologies to enhance your security posture in your most relied on communication platforms
- Comprehensive security training, tailored to the behaviors of people
- Building a security minded culture - this element falls into place when the previous two approaches are in full swing. When your people have the tools and knowledge they need to behave securely, your culture will look after itself.
Successful security postures are built on a thorough understanding of where the greatest threats lie. Identifying the biggest risks to your data, whether that be people, vulnerable networks or outdated technology, empowers you to take action to implement strategies that meet the needs of their organizations today and long into the future.
Learn how over 8,000 organizations are preventing data leaks with Zivver.
Last updated - 13/02/24