Cybersecurity risks and challenges facing the financial industry

Cybersecurity risks and challenges facing the financial industry

A primer on various threats looming over financial companies and the steps that the organizations can take to counter them

Companies operating in the financial services industry aren’t by any means strangers to being targeted by various forms of financial crimes and fraud. However, over time, the playing field has changed and threat actors have adapted their tactics to better suit the digital world. Cybercriminals now use different flavors of fraud and extortion as well as directly breach companies to line their pockets.

The seriousness of the threat cybercrime poses to businesses offering financial services can be illustrated by the cost of a data breach in the financial industry. According to IBM’s Cost of a Data Breach 2020 report, the average cost of a data breach in the financial services sector was US$5.85 million compared to US$3.86 million across respondents in all sectors in its survey.

Furthermore, the financial sector remains an attractive target for bad actors, especially due to the type and amount of information it collects from its customers. In the event of a successful breach, the data could be used to commit identity fraud or sold on dark web marketplaces, which could lead to reputational damage to the entity that was breached as well as possible reputational and monetary damages to the affected customers.

Verizon’s 2020 Data Breach Investigations Report estimates that 63% of attacks carried out against financial institutions are done by external threat actors motivated by monetary gain. In these cases, organizations can expect that cybercriminals will employ credential-stuffing attacks, social engineering attacks, fraud, DDoS attacks, and malwar ..