A comprehensive guide to security risks in financial services

icon Posted by: Hasan Sameer
icon September 5, 2022

In Brief

Why are Security Risks Increasing Over Financial Services?

However, all kinds of businesses are at risk of cyber-attacks these days. But financial services have become a popular target because of the direct monetary benefit attacker get after a successful attack. Also, there has been a steady increase in the number of non-cash transactions. This is an obvious indication of the substantial rise in online modes of transactions which makes financial services susceptible to all kinds of threats vectors present online.

$22

trillion was the evaluation of the financial services market in 2019.

24.9%

of all cyber-attacks are targeted at financial institutions.

151%

was the increase in ransomware attacks on financial institutions in the first half of 2021.

30%

increase was experienced by the financial sector in DDoS attacks in 2020.

Top Security Threats Among Financial Services

Financial services are subject to a lot of security risks. But the top ones are explained below:

1.      Unencrypted Data

If the data and code for a financial institution are not encrypted, it might cause a lot of damage. Luckily, this risk is very easy to recognize and fix as well. If the data of financial services is encrypted, it works as a fail-safe protocol when there is a security breach. Hackers won’t be able to misuse the data even if they get their hands on it. However, unencrypted data of a financial service might plunge the said organization into an almost non-recoverable loss in the event of a security breach.

2.      Malware

The banking operations involve a lot of computer and mobile devices and networks. All these are susceptible to malware. A device contaminated with malware when connected to the network of the financial service can interact with the network during a transaction. Moreover, it can sabotage the transaction and eventually cause loss to the institution and its clients.

3.      Insecure Third-Party Services

Most financial institutions such as banks interact with a lot of third-party services. There is no authenticity of Cyber Security Verification of these third parties. They have the potential to issue malware to the user end of your financial services. This may leave your organization to get exploited by malicious activities and cyber-attacks.

4. Manipulated Data

Now, this one is a security risk that financial services might find difficult and frustrating to deal with. Hackers exploit the system vulnerabilities and enter the database to manipulate crucial financial data. They keep these manipulations so subtle that they are almost impossible to trace. These manipulations might lead to digital and financial damages to institutions.

5. Spoofing

It is an innovative kind of cyberattack where hackers exploit generic bank website designs or predictable URLs. They create an identical website to fool the customer of the organization. They trick them into providing sensitive authorization data, such as usernames and passwords. This is more of an attack on the customers than on the financial services.

Best Cybersecurity Practices for Financial Services

Applying adequate security measures and following all the steps of Cyber Security Verification will ensure the safety of financial services to an extent. However, the following practice can give you full safety if you can adopt them with utmost precision…

1.      Establish a Formal Security Framework

Adapting to a formal and standardized security framework can give financial services a better chance of detecting and eliminating security risks. There are a few standard security frameworks among which you can choose a suitable one. Following are the two major security frameworks available:

  • The National Institute of Standards and Technology (NIST) Cybersecurity Framework
  • The Federal Financial Institutions Examination Council (FFIEC) Information Technology Examination Handbook

2. Train your employees to deal with security risks

No amount of tight security protocol can ensure 100% security if there is a scope for human error. Hackers often use social engineering techniques to infiltrate any organization. Employees here work as the medium to launch the attack. An email from an unknown sender containing a legitimate-looking Excel spreadsheet or Word document might contain malware. Hence, it is important to educate and train your employees to identify and negate such threats.

3. Continuous Threat Monitoring

Threat monitoring is necessary round-the-clock. A threat that was not at the doorstep of your financial services at night, might be there in the morning. Data shows that most threats are detected between 8 p.m. and 8 a.m. Real-time threat monitoring will help you identify any indication of malicious activity in time. You can easily rule out the possibility of an attack before it initiates.

Before You Go!

  • You got to know that security risks against financial institutions are increasing in number as well as complexity.
  • Measures of Cyber Security Verification can help you secure the IT infrastructure of your finance and banking business. However, you’ll need expert guidance for it.
  • Cyber security consultation with RSK can help you detect security risks within your organization and deploy adequate security measures to protect you from them.

Tags

  • cyber security verification

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