The following is an overview of the many threats that may affect financial institutions and businesses, as well as the mitigation measures that these organizations can put in place to reduce potential risks and harm.
Companies in the financial services business are frequently targeted by various sorts of financial crime or attempted fraud. However, the problem’s data has changed over time, and cybercriminals and scammers have altered their strategies to best fit the digital world’s landscape. In order to make cash, they now use sophisticated tactics of fraud and extortion, or they target corporations in an attempt to identify data breaches.
The anticipated cost of such a data breach in the financial industry demonstrates the gravity of these cybercrime acts for financial services companies. According to the IBM Cost of a Data Breach 2020 report, the average cost of a data breach in this sector was $5.85 million last year, compared to $3.86 million among respondents from all industries worldwide. The poll in question
Furthermore, the financial sector remains an appealing target for thieves everywhere, owing to the type and volume of information it obtains from its consumers. In the case that a breach is successfully exploited, the data may be used to conduct identity fraud or sold in dark-web markets, causing serious damage to the afflicted company’s reputation as well as image and financial loss to its impacted clients.
The COVID-19 pandemic compounded all of these risks, especially because many businesses were compelled to migrate to a remote work environment, which has its own set of issues. Because the transition was so rapid, firms’ IT infrastructures may not have had the time to adequately establish cybersecurity rules to reinforce potential weak links from the work-from-home transition.
There is an obvious need for enterprises to tighten their security procedures in order to reduce their vulnerability to prospective assaults. According to a recent poll of 10,000 customers and business leaders from around the world, 45 percent of firms experienced a data breach at some point.
The human factor
Employees are the foundation of any business. However, it has been demonstrated that “making a mistake is human.” According to IBM analysis, human error is one of the three main sources of data breaches, accounting for 23% of all instances resulting in such data leaks.
Employee errors can take many forms, such as falling prey to phishing or targeted social engineering attempts, or misconfiguration of a system. The first two errors are especially dangerous in the context of a remote work system change. As a result of being caught off guard by this sudden and unanticipated transformation, many businesses were compelled to respond reactively rather than painstakingly implement a well-thought-out plan. Employees who accepted the new work system in these circumstances did not receive additional cybersecurity training.
Attackers could take advantage of this knowledge by attempting one of the most financially damaging internet crimes-a business email compromise (BEC) identity fraud scam. During a BEC attack, black hat hackers contact their target (victim) through a compromised email account of a superior or a member of the business partner’s team, requesting the victim to do a seemingly legitimate operation, such as ordering and shipping things or making a bank transfer payment. Instead of supplying a valid address or bank account, the attacker gives the victim data that has been carefully prepared for the purpose of stealing money or items from the organization.
Companies should provide comprehensive cybersecurity training to staff to limit the likelihood of any of these situations occurring. Exercises that teach staff how to recognize phishing campaigns or social engineering attempts should be done on a regular basis. Furthermore, a useful step would be to offer staff with recommendations for safe remote work on a regular basis, as well as instructions on how to utilize video conferencing platforms responsibly or how to use remote access to corporate systems properly.
Companies can now protect themselves from future financial and reputational harm by implementing these security measures. Another benefit is that these cyber security techniques will be essential long after the pandemic has passed, as not all employees will be eager to return to office employment.
The technical factor
Employee training is certainly a crucial component of increasing cyber security, but there are other factors to consider. Cyber security should be considered in the technical solutions used throughout the corporate infrastructure. Although some firms may doubt the necessity of investing huge funds in this direction, it is always prudent to take well-developed measures. According to a survey, 28% of businesses do not actively invest in new technologies to secure their finances, or do not know if they have adopted adequate steps in this respect.
Every firm, no matter how big or small, should have a business continuity strategy in place in case of a cyber attack. An acceptable plan should always include data backups and, if the budget allows, an entire infrastructure dedicated to data backup security. They can be useful, particularly in the event of a successful ransomware attack. Backups must be periodically updated and tested to ensure they are functioning properly in order to be effective.
You should install available updates and patches to all of your operating systems and apps on a regular basis. If you engage a professional or have a cybersecurity department, they will almost certainly be in charge of handling these updates or configuring your systems to automatically update to the most recent version available. If your systems are managed by a third party, you should do the same. Given previous examples, such as WannaCryptor, also known as WannaCry, a ransomware that spread among PC systems that did not have the most recent patch applied, the importance of this step should not be ignored.
Another severe threat that businesses may face is distributed denial-of-service (DDoS) assaults targeted at crippling a target’s ability to deliver services. If a corporation is the target of a DDoS attack, its systems will be bombarded with requests, causing their websites to go down. This may easily result in revenue losses of tens of thousands of dollars for the targeted company. To reduce the likelihood of this occurring, businesses should seek DDoS attack mitigation services and choose an internet service provider with adequate bandwidth, equipment, and skills to deal with such attacks and regulate the flow of harmful traffic.
Conclusions
Although financial institutions continue to be lucrative targets for most hackers, they can substantially tighten their system security to reduce the danger of falling victim to the majority of the threats detailed in this article. To establish strong enough defense mechanisms, businesses must take a holistic and balanced approach, which necessitates investment in both personnel training and proper technology solutions, as well as business continuity plans.