Top Cybersecurity Threats in the Financial Services Industry

1. Attacks Involving Social Engineering Techniques

Malicious actors employ social engineering methods to establish trust with their targets. One prevalent social engineering tactic they employ is known as phishing. In 2022, approximately 36 percent of all global phishing attacks were directed at financial institutions. Email phishing is the most common type of phishing, involving the transmission of emails that mimic authentic messages in order to mislead recipients. Engaging with any of the malicious links or attachments in phishing emails often tricks users into providing their credentials to bad actors and might trigger the installation of malware on the targeted computer system. To mitigate the risk of phishing attacks, individuals should receive education on recognizing phishing attempts, regularly update their passwords, implement multifactor authentication, and install both anti-malware and anti-spam protection measures.

2. Malware and Ransomware Attacks

Ransomware, which is classified as malware, is a major threat encountered by organizations in the financial sector. According to a report from Sophos, instances of ransomware attacks targeting the financial services sector have risen, with 55% of organizations experiencing such attacks in 2021. Attackers employ various forms of extortion to coerce victims into complying with ransom demands. Regrettably, these extortion techniques are highly effective when directed at financial institutions, given the strict regulations that require exceptional resilience against cyberattacks and data breaches. To reduce the threat of ransomware attacks, it is advisable for individuals to regularly back up their data, set compliance policies and establish an incident response strategy to enhance their overall cybersecurity readiness.

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3. DDoS (Distributed Denial of Service) Attacks

The initiation of a DDoS attack commences by compromising several IoT (Internet of Things) devices. DDoS attacks are a common cybersecurity threat targeting financial services due to their extensive attack surface, encompassing banking IT infrastructures, customer accounts, and payment portals. With a successful DDoS attack malicious actors can install malware on each IoT device enabling remote control and subsequent connection to other compromised devices. According to a recent report, there has been a 22% year-over-year surge in the frequency of DDoS attacks targeting financial institutions. To bolster defenses against DDoS attacks, it is crucial to regularly update and patch your protective software, technology, and endpoints, in addition to implementing anti-DDoS hardware and software solutions.

4. Supply Chain Attacks

In order to execute a successful supply chain attack, malicious actors target vendors who have inadequate security practices in place. Software supply chains are particularly susceptible to these attacks due to the use of pre-built components such as APIs, proprietary code, and open-source code in the development of present-day applications. In 2022, there was a remarkable 742 percent surge in open-source software (OSS) supply chain attacks when compared year-over-year. The focus of these attacks was to capitalize on vulnerabilities within open-source ecosystems. To mitigate the risk of supply chain attacks, individuals should adopt zero-trust policies and employ endpoint detection and response solutions.

5. Cloud Security Threats  

Cloud computing provides a more efficient way of managing and storing files, but individuals should remain vigilant regarding potential security threats that can arise. As financial services companies increasingly embrace cloud computing, their security concerns have extended beyond traditional corporate boundaries. Errors in configuring cloud storage or financial applications can inadvertently expose sensitive data. According to a report from Thales, 39 percent of businesses encountered an incident within their cloud environment in the past year. To help mitigate cloud security threats, it’s advisable for individuals to encrypt their data and routinely update their passwords.

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