Cybersecurity isn’t a new topic by any stretch of the imagination. But while it may not be new, it’s definitely still relevant. In fact, recent government reports have found that 32% of UK businesses suffered an attack over the previous 12-month period, going up to 59% for medium-sized businesses and 69% for large businesses.
The financial services industry has long been a target for cyber crime, which isn’t at all surprising given the vast amounts of sensitive financial data that these institutions hold. This includes anything from bank details to investment portfolios, which can be incredibly dangerous if they land in the wrong hands.
While many companies are aware of cyber threats and actively welcome initiatives to reduce their risks, the multifaceted challenge they present can make this a tricky task.
In this article, we’re taking a look at some of the biggest cyber threats that face the financial services industry at the moment, as well as solutions to get your business into a more confident, secure position.
The current state of cybersecurity in the financial services sector
Unfortunately, as mentioned above, financial services companies are prime targets from cyber threats. While these institutions operate in a highly regulated environment, with many investing significantly into cybersecurity measures, this sector still remains under constant threat of attack from a variety of sources.
The rapid digitalisation of this sector has introduced new vulnerabilities and challenges, with financial transactions shifting online and providing even more opportunities for cybercriminals to exploit any weaknesses that they can find. This is in addition to ransomware attacks, which can cause severe disruptions to operations and significant financial losses, as well as phishing and social engineering attacks. Any form of data breach also has the potential to undermine the trust that customers have in their financial institution, leading to incredibly harmful outcomes for the brand name.
In response to these ever-evolving threats, financial institutions are adopting proactive and multi-layered approaches to cybersecurity. This includes implementing robust security measures such as encryption, multi-factor authentication, intrusion detection systems and the continuous monitoring of network traffic.
And while this is all well and good, the abilities of, and technologies available to cybercriminals are also constantly evolving. This makes cybersecurity a topic which is firmly at the top of the priority list for most institutions.
Key challenges the financial service industry faces
One thing that many businesses aren’t aware of is that cyber threats can vary significantly across different industries, with each sector facing unique risks and vulnerabilities. Factors such as the type of data handled, operational requirements, and regulatory frameworks contribute to the distinct threat landscape for each industry. This means it’s incredibly important to understand the threats that are specific to your business, as well as how to decrease their risks.
At CloudGuard, we recently undertook some in-depth analysis on some of the leading financial firms in the UK, highlighting the key areas that leave them vulnerable to an attack. A total of 20 leading firms were included in the review, running them through our passive scanning tool to understand what kind of basic security hygiene settings they had, paying particular attention to their email security.
Our scanning tool gives a rating from one to five, with five being the gold standard, one being very poor. The industry standard for all professional services is 2.73, and these 20 financial institutes came out with an average of 2.38, so just below standards.
Delving in a bit deeper, 35% of the companies were identified as having at least one critical risk, indicating a pressing need for immediate attention. Alarmingly, among these, 3 out of 20 are identified as having a Known Exploitable Vulnerability (KEV), which poses a severe threat as such vulnerabilities can be readily purchased on the dark web, ranging from $5,000 to $60,000.
Operating a business on the public Internet with a KEV significantly increases the likelihood of a successful cyber attack – it’s only a matter of when, really.
An overwhelming majority, 18 out of 20, of the businesses were found to have at least one high-risk vulnerability, emphasising the widespread prevalence of such risks. These risks are categorised based on their severity, with components like Apache Web Server, OpenSSL, PHP Engine X, and lodash being common culprits.
While we’re not naming names in our research, this just shows that even the biggest and most well-known names in the financial services industry aren’t safe from the threats of cybersecurity.
10 key challenges for the financial services industry
Off the back of our research, we found 10 areas that were causing significant grief for the financial services sector. Let’s take a look.
Skills gap
The financial services sector faces a significant skills gap in cybersecurity, with only 54% of CEOs feeling well-prepared for cyber attacks. Despite high transaction volumes and employment rates, there is a need for improved cybersecurity expertise and readiness across the industry.
API attacks
API vulnerability exploitation is on the rise, with a notable 64% increase in attacks observed. This trend highlights the importance of securing application programming interfaces (APIs) within financial organisations to prevent unauthorised access and data breaches.
DDoS attacks
Distributed Denial of Service (DDoS) attacks remain prevalent in the financial sector, with the UK getting 29% of attacks within the EMEA region. Although there was a decrease in absolute value in 2023, DDoS attacks are still a significant concern, especially in multilayer attack strategies.
Insider threats
Insider threats continue to pose a risk to financial organisations, with employees potentially exploiting vulnerabilities or sharing sensitive information. Understanding and addressing insider threats is critical to maintaining data security and trust within the sector.
Impersonation
Cybercriminals are increasingly using impersonation techniques, such as credential phishing and social engineering, to deceive employees and gain unauthorised access to financial systems. These attacks highlight the need for robust authentication measures and employee training to detect and mitigate impersonation attempts.
Malware strains
Financial organisations face a growing threat from various malware strains, including those generated using AI. With cybercriminals constantly evolving their tactics, financial institutions must stay vigilant and employ advanced malware detection and mitigation strategies to protect against these threats.
Significant transfers
The financial sector experiences significant volumes of transactions, with £26 billion processed in the final quarter of the previous year and £61 billion in total for 2023. These large transaction volumes make financial organisations lucrative targets for cybercriminals seeking to exploit vulnerabilities in the payment processing infrastructure.
Ongoing digitisation
The ongoing digitisation of financial services presents both opportunities and challenges for the industry. While digital transformation enhances convenience and efficiency, it also increases the attack surface and introduces new cybersecurity risks that organisations must address through robust security measures and protocols.
Protecting sensitive data
Financial institutions must prioritise the protection of sensitive data, including financial transactions and customer information. Implementing encryption, access controls, and data loss prevention measures is crucial to safeguarding sensitive data from unauthorised access or disclosure.
Fintech and trading app trojans
The rise of fintech and trading applications has introduced new cybersecurity threats, such as trojans targeting financial transactions and investments. Financial organisations must collaborate with fintech partners and invest in security measures to mitigate the risks associated with these emerging threats.
How to improve the cybersecurity of your finance company
If you’re concerned about how open your business is to potential cyber attacks, the key thing is to understand the areas in which you’re currently vulnerable. One of the quickest and most effective ways to do this is by undergoing a comprehensive security assessment.
Our Security Posture Assessment provides you with invaluable insights into your cybersecurity landscape, giving you a range of prioritised actions to help you close any gaps and reduce the risks your business is open to.
Our assessments only take around 3-4 hours, leaving you with strengthened cybersecurity posture that safeguards your business against external and internal threats.
Get in touch with our team today to find out more.
