There’s a reason that movies are made about bank heists and robberies; that’s where the money is. It’s also the reason why cyber criminals are eager to access the data held by financial institutions more than any other industry — 300 times more, in fact. And many are not prepared. Mostly it is small businesses that are getting started, because they are trying to get off the ground and they have not had the money to secure their finances and data.
More than two-thirds of surveyed financial institutions report increases in the number of cyberattacks targeting their companies. Firms of all sizes are at risk, including banks, credit unions, mortgage lenders, credit card companies, investment firms, payday lenders, tax preparers, pension funds and more.
Financial services cybersecurity is understandably a top priority in the industry, but what are the biggest information security challenges in the financial sector?
1. Malware Attacks
Phishing attacks continue to be the most common and lucrative tactics used by cyber criminals. Unsuspecting employees may click on a suspicious link or respond to a legitimate-looking email, only to be lured into a cyber scheme which eventually grants access to an unauthorized user. Once hackers are in, they can install malware onto a computer system and extract or manipulate data.
More commonly, however, hackers will render a system inoperable, bringing operations to a standstill and blocking access to authorized users. In exchange for releasing your systems, they demand ransom. Once paid, however, there are no guarantees that hackers will follow through on their promises. Of note is that about one-quarter of all data breaches are ransomware attacks. The magnitude of such threats emphasizes the importance of proper data backups and recovery systems.
2. SQL Injections
A common cyberattack method involves using malicious SQL code to manipulate backend databases. Once inside a system, a hacker can view or delete sensitive information and may even be able to gain full administrative rights.
There are many cybersecurity best practices for preventing a hacker from using SQL injections to infiltrate systems. Input validation, also referred to as data validation, is a first defense. As its name suggests, any data that is input into a system undergoes a validation process. If a potential user with a suspicious IP address tries to access the system, for example, they can be blocked. Having up-to-date firewalls, security programs and two-factor authentication can also serve as preventative measures.
Some hackers rely on simple keystroke errors to access the financial records of customers by creating a duplicate website that looks identical to the authorized version. A user may enter a URL that closely resembles the real one which brings up an authentic-looking imposter site.
These sites lead some customers to enter their login information which is then retrieved by hackers and used to access their real account on the legitimate website. By the time a customer discovers the error, their money's gone. Of concern is that some hackers are finding ways to target users who visit the correct URL, leading many financial institutions to amp up their security protocols.
4. Insider Threats
Sadly, insider threats constitute 34% of all data breaches, according to Verizon’s 2019 Data Breach Investigations Report. Similarly, employee errors led to 21% of breaches. While these numbers are disheartening, it emphasizes the importance of properly vetting employees, security training and having cybersecurity risk management protocols in place to ensure compliance.
5. Third-Party Software & Vendors
Major global financial institutions typically employ a large team of software developers to custom design solutions and mitigate cyber risks. This can provide some advantages over third-party softwares that may have known vulnerabilities.
Bigger is not always better when it comes to protecting your data, however, as was proven when one of the world’s largest financial firms, Capital One, discovered a major breach in 2019. A hacker — who was caught and now faces criminal charges for wire fraud and computer fraud — broke through a misconfigured Capital One firewall and reached the server storing its customer data.
Financial firms that aren’t as high-profile may rely on older third-party operating systems, making it even easier for cybercriminals to infiltrate them through SQL injections, cross-site scripting and other methods. Data encryption helps minimize a potential hacker’s ability to use information in the event of a successful hack. Financial institutions also need to consider the security protocols of third-party vendors and open source apps. While they may help streamline workflows, create efficiencies and serve customers, they may simultaneously put their data at risk.
Some third-party vendors can actually make managing risk easier and enhance security, however. Many financial institutions work with outsourced IT providers to deploy many of the solutions mentioned here and add another layer of security. At Technology Pointe, we have more than 20 years of experience working with financial services clients and securing their systems. Contact us today to explore how a partnership can enhance your security efforts, secure your customer’s data and protect your reputation.