February 3, 2023
Financial services organisations are a high-value target for cyber criminals. As a result, they are targeted with more cyber attacks than any other industry.
According to research by IBM, 23% of all cybe rattacks target financial institutions—and a typical breach costs over £4.5 million.
To stay ahead of these threats, financial institutions must maintain a mature cyber security program that mitigates risk while also satisfying strict compliance requirements—all while maintaining strong performance for customer-facing assets.
This article will cover seven of the most significant cyber security challenges facing financial institutions and provide actionable guidance on how to address them.
The 7 Top Cyber security Challenges for Financial Institutions
Financial services organisations typically have highly complex IT infrastructure, often involving a range of traditional and emerging technologies. This is essential to ensure a strong and current customer experience, but also creates risk—the more complex the technology stack, the more likely it is to include security gaps and vulnerabilities.
Solution: Regular security testing is essential, particularly for business-critical assets. Financial services organisations should have a strong, ongoing relationship with a trusted security partner that can deliver frequent penetration tests to quickly uncover and resolve vulnerabilities.
Financial services is among the most heavily regulated industries. Ensuring and maintaining compliance with all applicable frameworks and regulations requires a significant investment of time and resources. At the same time, the penalty for compliance failures can be high—heavy fines have become commonplace, and many cyber insurance providers are also beginning to make continuous compliance a requirement for coverage.
Solution: Various solutions and services are available to aid the process of becoming and maintaining compliance. The key is to determine your organisation’s precise needs and carefully evaluate options for external support to ensure resources are allocated effectively.
3. Application security threats
Web applications are common in financial services and are often essential to maintain a strong customer experience. Unfortunately, these applications are a tempting target for malicious actors, particularly if they store or interact with customer or financial data, so they typically face a wide range of sophisticated attacks. At the same time, web applications are typically in a constant state of development to add new features and ensure they stay current—this creates risk, as there is a greater chance of introducing new vulnerabilities.
Solution: More frequent security testing is essential for externally-facing applications, particularly if they handle sensitive information. Financial services organisations may consider crowdsourced testing for web applications, as it accurately mimics real-world attacks and can be engaged as a continuous service to more quickly uncover new vulnerabilities.
4. Data theft
Data is among the most valuable assets held by financial institutions, and a common target for cyber criminals. Customer and financial data are also heavily regulated. As a result, the impact of a data breach on a financial services organisation can be severe.
Solution: The most important step in protecting data is encryption. In the OWASP Top 10, the threat category ‘Sensitive Data Exposure’ was recently renamed ‘Cryptographic Failures,’ reflecting the fact that poor encryption is the root cause of data exposure. The solution is simple—all sensitive information should be stored securely at rest and in transit using appropriate and current encryption standards.
Further, financial services organisations should always have strong identity and access controls in place to prevent unauthorised access to sensitive information.
5. Third party risk
Financial institutions typically have complex vendor and partner landscapes. This creates risk, as vendors and partners often have access to sensitive systems and data. As a result, security weaknesses in the supply chain can easily lead to serious security incidents and breaches.
Solution: Vetting suppliers and partners is essential, and financial institutions should also keep track of their vendors’ and partners’ security maturity and threat landscapes. While this may sound daunting, there are solutions available that can significantly lighten the load.
6. Crypto threats
Cryptocurrencies are frequently used to commit fraud due to the higher levels of privacy (and in some cases, anonymity) they offer. Also, many cryptocurrencies and blockchain projects have been found lacking in security, resulting in high-profile scams and thefts. While there is no doubt that blockchain technology and cryptocurrencies have great potential for financial institutions, they come with significant risks.
Solution: If working with your own infrastructure, enlist the support of a vendor that specialises in blockchain architecture and security—ideally from the outset of the project, as security should be ‘by design’ rather than tagged on at the end. Once infrastructure is in place, regular security testing by a partner that specialises in blockchain security is essential. If infrastructure is owned by a partner or vendor, insist on regular audits with published results.
7. The cyber security skills gap
The skills gap is widely documented and has remained a huge challenge across all industries for over a decade. Most financial institutions find it tough to find and retain the security talent needed to properly defend their assets, data, and architecture—particularly when it requires rarer skills such as those needed to defend emerging technologies.
Solution: Increasingly, financial institutions are turning to trusted managed security service providers (MSSPs) for support with specific cyber security functions. While some functions are best retained in-house, others are ideally suited to outsourcing—MSSPs have the luxury of scale, allowing them to provide fully staffed, 24/7/365 security operations support, powered by the latest solutions and hard-to-find skills.
Focus on What You Do Best
Interested in how an outsourced SOC and Managed Detection and Response (MDR) service could help you address your top cyber security challenges?
CyberOne provides the UK’s most advanced managed SOC, providing 24/7/365 protection from our award-winning Security Operations Centre in Milton Keynes.
To find out how Managed SOC Services could help protect your financial institution, contact us today.