The finance industry, comprising everything from brokers to loan servicers, contains sensitive and tempting information for hackers. Cybercriminals successfully threatening and obtaining information can jeopardize the reputations of businesses and steal data, causing customers to lose trust.
Therefore, the financial sector requires more attentiveness to security measures than most others. Since the accessibility of international news incites cybercriminal activity, companies should prepare accordingly. Investing in these measures starts with awareness of the threats and prioritizing courses of action to improve protection from here on out.
Federal Reserve Details Cybersecurity Threats
The Federal Reserve has recently released a report detailing the biggest cybersecurity threats to the financial sector. Here’s what you need to know.
Phishing as a Service (PhaaS)
One of the fastest-growing threats is phishing as a service. Phishing is when attackers obtain personal information, like credentials or credit card numbers, by securing trust. They can come across as legitimate by using tactics like branded emails that appear to be from a specific financial institution.
However, phishing as a service (PhaaS) takes it to the next level by offering cybercriminals an entire suite of services, like setting up spoof login pages and using automated response bots to impersonate company assistants.
Charles Schwab, Chase Bank and Wells Fargo have frequently used domains for phishing. In fact, Schwab accounted for up to 13.5% of all cases over a three-month period. These prepared kits make phishing attacks more accessible.
Ransomware
Attackers can steal data and hold it for ransom like in classic films — this is ransomware. The malware acts as a barrier between users and their systems, as attackers threaten to publish or sell the information they’re holding hostage.
The Federal Reserve Cybersecurity and Financial System Resilience Report stresses the immediate threat of ransomware, as it is more sophisticated than ever and proliferation speeds are higher.
Cyberattackers have taken PhaaS kits and molded them for ransomware or RaaS models. These provide comprehensive packages for full-scale attacks on banks and insurance companies.
Denial of Service Attacks (DDoS)
These attacks are when cybercriminals overwhelm a network with fake connections to the point that it is unavailable to regular users. Because of the array of online services used by financial institutions, these attacks can run deep. They can attack a bank’s customer login portals.
This action is sometimes the whole attack or a distraction for hackers to buy time to commit other crimes. Online connectivity increases daily, so these attacks can be more comprehensive and organized, striking many systems simultaneously. DDoS attacks increased by 110% in 2020 and are one of the most consistently rising threats.
Nation-State Sponsored Attacks and APTs
Hackers target specific nations, states, or organizations with advanced persistent threats (APTs). These can contain several cybercriminal methods, including DDoS attacks. They are often large-scale, attacking entities like governments.
The AI helping commit these attacks creates exceptional risks to societal balance. Political discussions tend to focus on wars and conspiracies like voting and election fraud, and hackers see opportunities.
This problem is such a monumental concern that the Biden administration has passed significant legislation in the last two years alone to combat these threats. Other countries are reacting similarly. Financial institutions can link to larger government bodies, so these attacks cause a chain reaction of consequences.
Emerging Tech Threats
Consider how many technological developments related to personal finance have arisen in the last several years. Mobile banking apps that often share data with third-party services and cryptocurrency trading are only a couple. These new tools often provide seamless user experiences, but the avenues for attackers become more plentiful.
This isn’t even considering how younger generations get information rapidly because of internet communication. This situation affects financial institutions and stocks worldwide. More people are informed and participate in asset trading and purchasing. The exchange and holding of digital assets usually rely on private keys, which are equally up for grabs by cyber attackers.
Old technology used in new ways also provides more routes for attackers to be inventive. Cybercrime outfits benefitted from manipulating previously underutilized conference calling programs as work-from-home increased during the pandemic.
In fact, 43% of remote employees say they made mistakes that resulted in cybersecurity problems for their companies. User error increased due to people struggling with mental health and acclimating to a new work environment.
Threats happened, and humans reacted accordingly after realizing backdoor access was unattended. The process of keeping up with the trends and threats is available to all financial institutions, big or small.
Best Ways To Protect Financial Data
Crafting best cybersecurity practices is an art. Employees can use online safety basics of never leaving their device unattended, or there can be a companywide plan. In case of a ransomware attack, all these things are helpful in the modern technological age.
The best way to protect against cyber attacks isn’t necessarily software but rather policy. No matter the size of your business, it’s crucial to establish baseline security standards, train staff, and implement security processes before any cyber attack. Then, when an attack does occur, you are ready with security measures already in place.
Action plans to provide powerful cybersecurity for a financial institution can take many forms:
- Providing employees training on current trends and best practices
- Implementing authentication measures, like multifactor authentication
- Having external backups containing up-to-date company documents and information
- Requesting services from third-party risk management programs
- Updating existing malware, antiviral and firewall installations
Attackers can enter any number of ways — through phones, email, cloud services, videoconferencing, and public Wi-Fi networks. Guarding every avenue is the ultimate goal of protecting financial data.
Maintain Secure Defenses For New Threats
Information is constantly on the move, so scammers have many chances to attack. The more financial institutions rely on technology, the more susceptible they are to outside risks.
The modern era requires technological advancements and added precautions — thankfully, they’re accessible. Staying on top of the latest threats in cybersecurity can create the best safety blanket for a protective strategy.