The threat and impact of cyber risks is increasing in all industries, but criminals target financial firms because that’s where the money is. Slowly but surely, cybersecurity is becoming the forefront of all financial firms’ agendas with bank account fraud being one of the most common forms of financial cybercrime being reported.  The financial industry holds some of the most sensitive information about individuals and sufficient safeguards need to be implemented to ensure its maximum protection.

Top Cyber Risks Facing Financial Institutions

1. The Digital Transformation

Digital transformation focuses on leveraging digital technologies and massive amounts of data, and real-time, data-driven decision making for explosive economic growth and quality-of-life improvements. It is rapidly reshaping the way that products and services are conceived, delivered and consumed. As financial institutions innovate to meet their digital needs, they are also increasing their attack surface. With web applications becoming more ubiquitous, online banking and mobile applications make for the most targeted areas with hackers known to look for vulnerabilities within the application or attempt to use stolen credentials to access accounts.  To mitigate the risks, financial firms must implement advanced application security protocols alongside their digital transformation initiatives.

2. The changing threat landscape

There’s no question that the threat landscape is constantly shifting for financial services companies. The number and range of vulnerabilities is growing as companies outsource internal processes, shift computing to the cloud, and connect to customers through more channels. The changing landscape also brings several sophisticated phishing threats with it. The ransomware epidemic is growing and these types of attacks often result from successful email phishing.  Last year alone, the ransomware costs exceeded the $5 billion mark and these costs include business disruption, data loss, lost productivity, reputation damage, employee training, and disaster recovery. The commodification of dark web services and the growing threat landscape enable the increase of financial fraud, creating a continuous battle and race for financial institutions to keep up with.

3. Insider Fraud and Third Party Risk Management

Insider fraud is a major problem for the financial industry. If you combine insider fraud with slow detection the risk becomes even larger. Insider fraud crimes tend to be low-tech incidents relying on knowledge and access, not cyber tools. And fraud schemes often go undetected for up to 32 months.

Protecting your financial organisation against insider fraud is the sensible approach, managing third part cybersecurity risks is just as important. If a third party handles your customers’ data, you have a responsibility to ensure they are secure. You and your customers must not be at risk.  If a hacker isn’t able to penetrate your security defences, they will turn their focus to your vendors’ networks. It only takes one compromised network to be successful.

The Approach

More often than not, when investing in cybersecurity, organisations receive recommendations to invest in a system. They can end up considering the wrong aspects before making the decision to purchase. This leads to investing money in systems that may end up the wrong fit for the organisation. Before investing in cybersecurity systems, the maturity level of the organisation needs to be determined. A risk-based approach needs to be implemented with a full assessment of all departments. Implementing a system without assessing maturity level and risk can leave an organisation unable to maintain the system and leave open gaps.

Implementing a cybersecurity system and culture needs to have support and involvement from the top-down.  A culture of protecting the organisation will only truly succeed if all levels of staff are involved and active. The concept that cybersecurity is only ‘IT’s problem’  is no longer a reasonable argument. Make sure that your business plan has a cybersecurity component. It’s not complete without one.

The Technology

Leading financial organisations are now starting to reap the benefits of investments in emerging technologies. This allows them to mitigate their cyber risks.

When deciding where to invest, financial institutions must consider the business risks and relevant mitigation techniques. One of the most comprehensive options for maximum cybersecurity protection is the implementation of a security information and event management (SIEM) solution, like IBM QRadar. A SIEM platform collects data from firewalls that might indicate successful communication with domains or IPs. It also detects malware associated with these domains and includes antispam software that identifies files that could damage the internal network — all in real time and summarised in a single security alert. By cross-referencing this security intelligence with public indicators of compromise (IoCs), security analysts can spot and respond to malicious network activity — especially ransomware — quickly and more accurately.

To address the risk of insider fraud, financial institutions can visibility into behavioural anomalies using UBA – User Behaviour Analytics. As a component of the QRadar Security Intelligence Platform, QRadar UBA adds user context to network, log, vulnerability and threat data to more quickly and accurately detect attacks. Security analysts can easily see risky users. They view their anomalous activities and drill down into the underlying log and flow data that contributed to a user’s risk score.

Summary

Ultimately, in order to protect a financial organisation against cyber risks, implementing security measures must have a holistic approach. Education and a change in culture must complement the emerging technologies that drive the cybersecurity capabilities.  The risk to financial companies is going to continue to increase with the risk growing every single day. Financial institutions must ensure cybersecurity is a priority both internally and externally. There is always a new threat on the horizon.

Smarttech247