Banks, credit unions, investment firms, and other financial institutions store enormous amounts of sensitive data in cloud platforms and applications, making them a prime target for cybercriminals who seek to profit from that information via fraud, extortion, or outright theft. In fact, according to a report by the Boston Consulting Group, financial service providers face cyberattacks at a rate 300 times greater than other industries.
These threats can come in many forms, ranging from relatively simple brute-force attacks to highly sophisticated social engineering schemes. Regardless of their scale or complexity though, all are capable of causing massive turmoil in the form of regulatory risk, financial loss, interruption of operations, and reputational damage.
In order to mitigate the risks and impacts of these attacks and implement an effective cyber security plan, businesses must first understand the risks in play. To help, we’ve compiled a guide to the largest threats to cyber security for financial services today.
Ransomware
Ransomware is a type of malicious software that encrypts its victim’s files, at which point the attacker demands some form of ransom payment in exchange for a decryption key that will restore access to the files.
Financial institutions are common targets for this type of attack, as the information they handle is valuable. In most cases, attackers will threaten to publicly expose or sell customer passwords and banking details if their demands are not met, resulting in many of these ransoms being paid to avoid reputational damage, even though ransom costs are often higher than the cost of data remediation.
According to Sophos’ State of Ransomware in Financial Services Report, the rate of ransomware attacks in financial services went up from 55% in 2022 to 64% in 2023, which was almost double the 34% reported by the sector in the 2021 report.
DDoS Attacks
Along with tech and telecommunications, the finance industry has remained one of the top targets for distributed denial of service (DDoS) attacks in recent years, a form of cyber attack in which the perpetrator seeks to make a website or online service unusable by overwhelming it with traffic, typically through the use of a network of compromised devices known as a botnet. These attacks are enormously disruptive, causing significant downtime that can cost businesses tens of thousands of dollars, if not more. A Radware report found that the average downtime cost of an application DDoS attack is $6,130 per minute.
In addition to volumetric DDoS attacks that simply flood the target with traffic, there are protocol attacks, which exploit vulnerabilities in the communication protocols used by the target, and application attacks, which target specific applications or services.
Making matters worse is that these are often only one prong of a broader and more sophisticated attack, such as in a multi-vector DDoS attack that seeks to overwhelm financial cyber security teams so that other vulnerabilities can be exploited during the chaos.
Social Engineering
As financial cyber security tools have become more advanced and capable, clever criminals have realized that the weakest link for these firms is often their own employees and customers. Rather than hacking or using malware, social engineering attacks rely on tricking people into turning over sensitive data or credentials that can be used to penetrate security measures.
Phishing is the most common form of this kind of attack, in which an attacker poses as an official entity, such as a banking associate or government agent, and requests sensitive information such as login information, passwords, or PINs.
While many of these attacks are easy to spot, some are quite sophisticated, using spoofed emails and phone numbers or fake websites to appear to be more legitimate, and they may use urgent language or the threat of fines, fees, or account closures to prompt fast action and trick the victim into overlooking otherwise suspicious details.
Other forms of phishing include spear-phishing and whaling, which target specific personnel and executives, respectively, using similar tactics to standard phishing attacks, but often go to more effort to collect personal information or build trust with the victim in order to bolster the chances of success.
Cloud Security Threats
Many organizations fail to include cloud applications in their cybersecurity program for one simple reason: they believe the cloud service provider will handle it. However, under the shared responsibility model, businesses are addressing data security risks within SaaS assets, even though the cloud applications are maintained by the SaaS provider.
Not understanding this responsibility can cause unexpected gaps in security, response, and recovery. Misconfigurations or incorrect permissions in financial applications can accidentally expose sensitive data. Similarly, vulnerabilities or flaws in a cloud vendor's own security could also trickle down to their customers.
Own for Financial Services
Own Company helps financial services companies protect the data stored in their business-critical SaaS applications, such as Salesforce, ServiceNow, and Microsoft Dynamics 365.
Own Recover delivers reliable restoration capabilities that are fast and precise. Recognizing that operational resilience relies on people, processes, and technology, Own helps financial services customers continuously improve their preparedness with Data Recovery Readiness & Response (DR3™) for SaaS, providing periodic tests and reports for regulatory compliance.
For Salesforce in particular, Own Secure facilitates least privilege access and accelerates data classification and encryption. Secure for Salesforce offers proof of compliance with Security Insights and an exportable PDF report that provides an overview of the current state of SaaS data hygiene, protection, and risk.
Learn more here or request a demo below.
