October 20, 2022

Why Cybersecurity Attacks Are Increasing in the Financial Industry

What Is the Outlook for Cybersecurity Threats 2022 and the Future?

The financial industry is one of the most frequently targeted industries for hackers due to its substantial number of users and high-value assets. Over the past few years, cybercriminals have been able to steal billions of dollars from banks and brokerage firms by stealing customer data and hacking into their systems.

In fact, according to a recent IDC survey examining 5,500 organizations across 12 countries, 99% of respondents said they had experienced a security breach that resulted in financial loss or compromise. The report also found that the average cost to protect against cyberattacks is $11 million per incident. It is significantly higher than non-financial targets, which only cost an average of $6 million to defend. This cybercrime landscape has been evolving at an alarming rate, which makes it critical for financial institutions to take steps to mitigate their exposure when it comes to cybersecurity attacks. 

The good news is that cybersecurity has become an integral part of business operations. As companies seek ways to protect their valuable information assets and mitigate the risk associated with cyberattacks, they are turning to cybersecurity solutions such as firewalls, intrusion detection systems, antivirus software, and more.

What Are Cybersecurity Attacks?

A cybersecurity attack occurs when someone uses a computer network exploitation to obtain information, disrupt operations, or cause damage. An attack can be intentional (an attempt to steal data or disrupt operations) or unintentional (an attempt to collect information that was not intended).

Cybersecurity attacks differ from other forms of cybercrime in that they are complex and are often executed by high-caliber hackers. These attacks are often more complicated than simple theft of personal information, as they require more technical knowledge, time, and effort to execute successfully.

Below are some common types of cybersecurity attacks:

  • Malware infections: Malware is software that is designed to spread to other computers and networks, often without the knowledge or permission of the owner. It can take many forms, including keyloggers and Trojans, which are designed to steal personal data or cause damage through unauthorized access to computing resources and networks.
  • Denial of service (DoS) attack: A DoS attack is an attempt to disrupt or disable a system or network using sophisticated automated software programs, also known as bots. A DoS attack can be performed by flooding the system with abnormal amounts of data, such as requests for data, or by overloading the system with excessive traffic.
  • Phishing: Phishing is a type of cyberattack where attackers send emails that appear to come from legitimate companies and organizations to trick users into revealing sensitive information, such as passwords, account numbers or credit card details.
  • Social engineering: Social engineering attacks include sending out spoofed emails, using fake websites or even tricking users into downloading malicious software. This attack is designed to trick people into performing actions that give attackers access to their computers or devices, such as clicking on links or installing malware.
  • Man-in-the-middle (MITM): MITM attacks allow attackers to intercept traffic between two parties, usually on public networks such as the Internet. In a MITM attack, an attacker inserts himself as a middleman and captures traffic passing between two parties. He then relays that information back out at full speed, allowing him to view or modify it in transit without being detected by either party.
  • SQL injection attacks: SQL injection vulnerabilities occur when untrusted data is passed into a SQL database without explicitly escaping special characters interpreted as commands by the database engine (e.g., single quotes in strings).

Why Are Attackers Targeting Financial Companies?

While cybercriminals have targeted many types of organizations, financial services are among the most common targets. Financial services companies are easy to penetrate because they have enormous amounts of sensitive data and often share it with third parties.

Financial services companies also tend to target cybercriminals because they make high-value transactions. It makes them a lucrative target for attackers who want to steal money or get access to personal information.

Some of the key reasons why financial services are a top target for cybercriminals:

  • High-Value Transactions: Financial services companies often make high-value transactions, making them a target for attackers who want to steal money or access personal information.
  • Large Amounts of Sensitive Data: Financial services companies have large amounts of sensitive data and often share that data with third parties. It makes the systems vulnerable to hackers, who can use the information to steal money or access personal information.
  • Vulnerable Systems: Financial services companies often use outdated or vulnerable software that hackers can easily exploit. In addition, many financial institutions rely on unpatched software vulnerabilities and out-of-date security patches, which makes their systems especially susceptible to attack.

From 2009 to the present, some of the most well-known names in the industry have been breached on multiple occasions. American Express and SunTrust Bank were breached five times, and Capital One and Discover were breached four times each. Some recent cybersecurity attacks involve companies like Flagstar Bank, which leaked the Social Security numbers of almost 1.5 million customers, and Block (formerly known as Square), whose employees downloaded reports detailing customer information without permission.

Cyberattacks on financial institutions have little direct risk to consumers if they use reasonable safeguards to protect their information. They are protected by US federal law, which requires banks to refund customers who notify them within 60 days of an erroneous transaction appearing on their statement.

Banks, on the other hand, have fewer guarantees from the federal government. The US Department of the Treasury’s Financial Stability Oversight Council is charged with monitoring the stability of the nation’s financial system. Critics argue that the council is not doing enough to prepare for cyberattacks that could jeopardize the operation of banks.

Protecting Your Firm

Cyberattacks have become a genuine concern and a significant threat for financial firms. Data is one of its most valuable assets, and a solid cybersecurity strategy is the best way to safeguard data against cyberattacks.

Here are ways to protect financial firms against digital threats:

  1. Monitor the use of computer equipment and systems. Financial firms should monitor all devices and systems used in their offices to ensure that they are not being used for unauthorized purposes or the benefit of any third party.
  2. Secure devices and networks. Ensure that all devices used in the workplace are password protected with strong passwords that cannot be easily guessed or broken into using brute force attacks.
  3. Use multi-factor authentication (MFA). It involves requiring users to provide two forms of identification before they are granted access to the system or device.
  4. Back up data. The best way to protect data is by keeping it in multiple locations and backing it up regularly, according to the Federal Deposit Insurance Corporation (FDIC). The FDIC recommends that financial firms backup their data servers at least once every 24 hours. Still, they should also consider using a cloud-based storage service to keep their backups accessible anywhere, even when they are offline.
  5. Encrypt important information. Protecting sensitive information with encryption is another critical step toward protecting your firm from cyberattacks. Encryption scrambles a message so that only authorized recipients can read it, even if someone tries to intercept it en route from sender to receiver.
  6. Train employees about online safety. Train employees on how to recognize phishing emails, how to respond if they receive one, and how to protect themselves from being infected by malware. They should also be encouraged to report suspicious emails or posts online as soon as possible so they can be dealt with immediately.
  7. Put cybersecurity policies in place to guide employees. A good cybersecurity policy must include details about what types of data are protected, who has access, and how long it will be kept before being deleted. They should also know who will make changes, what happens if someone violates the policy, and how the company will manage complaints about its security practices.
  8. Protect customers. Firms must ensure that their customers' data is safeguarded against cyberattacks by ensuring that their systems are not vulnerable to any cyberattacks.
  9. Consider cybersecurity insurance. Cybersecurity insurance can help firms cover losses resulting from cyberattacks or malware infections on their systems and cover costs associated with data breaches such as legal fees and PR damage control efforts.
  10. Get updated on the latest risks. Monitor digital security risks regularly to ensure awareness of new threats or vulnerabilities in information systems, networks, and remote access tools. It will help respond quickly if any incidents or attacks could impact business operations or customer trustworthiness.

Partner With Cetrom To Support Secure Systems

Cetrom is a well-established, proven cloud hosting solution providing advanced support to financial firms of all sizes. We can help you with your cybersecurity needs.

Our security solutions are designed to meet the most stringent requirements of financial institutions and comply with industry regulations. Our security experts have years of experience implementing security solutions for financial organizations and can provide you with the right solution to keep your business secure. We can also help you identify vulnerabilities in your system, assess risks, implement solutions, and monitor compliance.

Contact Cetrom today to learn more about how we can assist you with your cybersecurity needs!

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