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Human Error’s Impact on Financial Services Security

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By Paul Holland, CEO of Beyond Encryption

 

According to the Information Commissioner’s Office, in 2021 there were 9,758 recorded security incidents altogether, with only 2,759 of these being classified as cyber incidents. The remaining 6,999 were classed as non-cyber incidents, caused by human error, with the most frequent incident (1,637) being misfired emails.

Even phishing – a commonly known social engineering tactic that prays on human error and a lack of vigilance around cybersecurity – caused fewer incidents, with the ICO reporting 1,016 in 2021.

What does this mean? According to the data, it is 61% more likely for businesses to send an email containing sensitive data to the wrong recipient than to fall victim to a phishing attempt. On one hand, a case could be made that people are becoming more educated on phishing attacks, as 2021’s data does show a 12% drop in reported incidents compared to the previous financial year. On the other hand, it could be argued that a similar level of education needs to be made on the amount of outbound email-related data breaches.

Email is a powerful collaboration tool and is vital for businesses. However, it is also a major exit point for sensitive data. The average office worker is believed to send roughly 40 emails every day. Over the course of five days, this provides approximately 200 opportunities a week to inadvertently send data to the wrong recipient. In the case of the financial services industry, where organisations are routinely handling and transferring highly sensitive financial or personal information, this poses a significant problem. With 95% of cybersecurity breaches being caused by human error, it is clear that financial service organisations need to place much more focus on the human side of security.

 

Influence From the Pandemic

The COVID-19 pandemic has had a significant impact on the way that businesses approach security. In an office, an organisation can easily create a secure environment through firewalls, anti-virus solutions and a range of other network security measures that keeps office activity safe.

Working from home changes that. Businesses have to relinquish some of the control over the security measures they could put in place for employees, instead having to rely on their staff to remain vigilant towards cybersecurity. In an ideal world, that shouldn’t be an issue as long as staff have the correct training. According to research undertaken by the Aberdeen Group in 2019, security awareness training can reduce the risk of socially engineered cyber threats by up to 70%.

However, it is also important to understand the wellbeing impacts that the pandemic had on staff. Research has shown that between 2019 and 2020, there were an estimated 828,000 workers impacted by work-related stress, depression, or anxiety. Separately, Benenden Health found that 32.8% of people rate a heightened workload as the primary cause for workload stress and mental health issues.

Someone can receive all the training in the world, but if they are feeling stressed or anxious over an increased workload and a range of distractions caused by working from home, cybersecurity can quickly fall down the priority list for an employee. We don’t live in an ideal world, and as long as these challenges remain for employees, the risk of human error will persist.

 

Removing Human Error from Financial Services

The growing issue of human error must be tackled – both in the office and at home. In an industry that consistently handles high-value and sensitive financial transactions across a range of applications and identity checks, security must remain airtight at all times – especially within email communication.

Email can have a bad reputation. It is now considered one of the world’s most insecure mediums. Yet, it remains one of the most convenient and popular tools to communicate and share sensitive information, with the DMA(https://dma.org.uk/)  reporting that the majority of individuals have held their current email address for over 10 years. Businesses need to utilise the right tools that can provide secure digital communications. By leveraging encrypted sensitive document delivery, organisations can have the freedom to exchange information confidently, cost-effectively and with full compliance.

Human error will never be eradicated completely. But financial services businesses can mitigate risk and achieve peace of mind by ensuring that their email communication is encrypted, with the ability to revoke user access if the email is sent to the wrong recipient.

Not only does this create a highly secure environment for employees in both the office and at home, but it creates a frictionless system that streamlines workflows. Important documents can be shared with colleagues or clients without fear, and without compromising privacy.

 

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A lack of training and email security solutions is contributing to a rise in email threats targeting the finance sector.

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By

Mike Fleck, Senior Director, Sales Engineering at Cyren

 

Email remains the most popular and successful attack vector in the digital landscape, the reason being because it is simply the most commonly used digital communication channel across the globe. On average, over 330 billion emails are sent every day. The sheer volume-and the fact that almost every employee within an organisation uses email- makes this channel a popular target for potential security threats. Finance organisations use email not only for internal communication but also for customer service interactions and marketing. A banking survey in 2021 showed that over 76.8% of users consider email as the primary channel for communicating with banks. That’s why financial institutions are at the frontline of email-driven security risks.

In order to attain more insight into the email threats targeting the financial sector and the potential remedies, we talked to Mike Fleck at Cyren, a leader in enterprise email security solutions.

  1. What do you see as the main reason for the continued increase in successful email threats targeting the financial sector?

Email threats have become much more dynamic over the years.  Although phishing continues to be the most common attack vector in the domain of email threats, the mix of breaches attributed to email attacks has expanded significantly in recent times. In our latest benchmark research, we surveyed 226 organisations that use Microsoft 365 for email. We found that compared to 2019, there was a 71% increase in ransomware-driven email attacks, 44% increase in phishing attacks, and 49% increase in credential compromise attacks. Phishing is no longer the only path for email threats, as attacks are now being driven by multiple sophisticated methods, which evidently leads to more successful threats.

Mike Fleck

The financial sector has always had a red mark on its back to threat actors, mainly because of the highly sensitive information and valuable assets managed by financial organisations. Email serves as the most vulnerable and easily compromised access point for threat actors, which is why the number of email breaches has massively increased over the years. Our research found that the number of email breaches across all organisations has almost doubled each year over the past three years.

Although most organisations are using email client plug-ins for reporting suspicious messages, only 22% of the organisations stated that they analyse all reported messages for malicious content, leaving a major gap in awareness and threat response. Our survey showed that inefficient threat response and a lack of urgency is the most concerning factor for security managers. Threat actors are consciously aware of these shortcomings, which is why they are able to frequently launch successful email attacks targeting the financial sector.

  1. Why is the email channel so appealing for fraudsters, and what are the techniques they use to target financial service organisations in this way?

Historically, email has always been the primary channel for business communication, and as businesses continue to attain cloud-based services, email has become a productive norm for file-sharing and communication. Email channels also integrate easily with any cloud application, facilitating businesses to pursue more productive interactions. There is also the fact that email is accessible to most personnel regardless of their technical ability.

This flexibility and continued dependency on email is also the reason why it is an appealing channel for threat actors. Because email channels are integrated with almost every organisation’s platform, breaching an email allows cybercriminals to backtrack into critical network infrastructure and compromise valuable assets. Most threat actors tend to target the user rather than the system, and email channels are used by almost every employee in a financial organisation regardless of their experience, role, technical awareness, or skills. Therefore, targeting emails allow threat actors to utilize a much wider attack surface.

Another major reason is breaching the email channel is far less complex than breaching secured network endpoints and access firewalls. With techniques like social engineering and phishing, threat actors often don’t have to use significant resources or complex methods to breach employee email accounts. Our research showed that phishing is still the most used technique by attackers; 69% of all email breaches were due to phishing attacks. Other frequent techniques were Microsoft 365 credential compromise (60%), malware (59%), and ransomware (51%).

The means of carrying out these attacks are also easily accessible and available to almost anyone. Threat actors can buy a ransomware kit for as low as $66, and phishing kits are available for as little as $20. So, even the most inexperienced attackers can use such tools to exploit the email accounts of users and gain access to the critical resources of financial organisations.

Simply put, email provides a direct and economical path to the weakest point of every organisation’s cybersecurity program – its people.

  1. How important is proactive security awareness training when it comes to defending against email attacks?

The previous consensus was that email threats thrive on the user’s lack of awareness. Cybersecurity leaders believed that the “last mile” problem of phishing attacks can be solved if employees are able to detect and avoid fraudulent emails. Frequent awareness training is important to help employees stay up to date on evolving email attacks and identify malicious content or messages more easily. Over 99% of organisations offer awareness training, but only one in seven organisations offer training monthly or more frequently.

The dynamics of the attack vectors and techniques change constantly with the emergence of new technologies and vulnerabilities. Without frequent training, employees won’t develop a conscious awareness of email threats. We found that organisations that offer email awareness training every 90 days or more frequently, are less likely to fall victims to phishing, business email compromise (BEC), and ransomware attempts.

Our research also showed a correlation between frequent training and email reporting frequency. Organisations that offer frequent training also experience a high rate of malicious or suspicious email reports – meaning that employees become more conscious and aware of the potential threats. That’s why frequent proactive awareness training is critical for protecting against email attacks. However, organisations need to appreciate that a higher volume of reported emails will result in a higher number of alerts that Security Operations Centre analysts must investigate.

  1. What are the steps you would recommend financial organisations take to implement effective inbox security solutions that bolster their cyber resiliency immediately?

Financial organisations need to act quickly when responding to a potential threat, as even a fractional security breach can cause unprecedented damage to its assets. Organisations are beginning to realise that employees fall victim to these scams because they are busy and distracted – not because they are apathetic or gullible. Also, relying on employees to spot and report suspicious messages is not a complete or efficient solution to the problem. Employees do not consistently report every threat, and what alerts they do generate have a false positive rate of at least 41%. In addition to constant awareness training, organisations must incorporate effective inbox security solutions to increase their cyber resiliency.

When implementing effective inbox security solutions, financial organisations must consider the response and reporting time.  They must choose solutions that can detect threats in real time and automate the response to those threats for quick remediation.

An effective approach for financial leaders is to invest in automated solutions that can detect and remove social engineering threats in real time. Automated inbox security solutions can continuously scan inbound and outbound email folders, including their contents such as URLs and web pages. Such solutions can detect and report anomalies, resulting in real-time detection. Automated threat response solutions can strengthen the built-in security capabilities of the email gateway, such as Microsoft 365 Defender. Combining automated solutions with the existing threat response framework can optimise the response process and significantly reduce the time and cost of threat investigation.

 

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Finance

Main Factors Accelerating API Security Risks in Financial Services

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By: Yaniv Balmas, VP of research at Salt Security

 

The API ecosystem is exploding and nowhere has API delivery accelerated as much or as fast as in financial services. Leveraging APIs, financial services organisations can innovate and quickly bring to market unique customer experiences and services. While more than three-fourths of software developers say API development is or will be a top business priority, the figure is even higher in financial services – topping all other industries at more than 80%.

Because successful attacks are so lucrative against financial institutions, they have always been a top target. The growth of the API economy has made the financial sector an even bigger target, which is why minimising API security risks has become the top priority.

Four factors are driving the urgent need for better API security in financial services:

  • API usage in financial services is increasing
  • API attacks threaten digital transformation initiatives
  • API security incidents hurt customer trust
  • Traditional security solutions don’t protect APIs

API Usage Will Increase Even More

In financial services, the high-growth trajectory of APIs will continue to rise. With each use case and new service, the number of APIs in a typical financial services company grows ever higher.

APIs provide the required data connection to support today’s mobile financial applications and peer-to-peer payment systems. APIs are at the center of open banking. APIs enable financial services companies to standardise how they connect and exchange data, allowing consumer financial information to be instantly shared across organizations and third-party service providers. With different partners and technology suppliers, API connections are being continuously added to the financial ecosystem.

For financial services, that means even more APIs and a continuously growing attack surface that must be adequately protected.

API Attacks Threaten Key Business Initiatives

Open banking gives consumers more choices and convenience to address their financial needs. It also increases competition across the financial services industry and generates new revenue avenues. In addition, open banking provides more traditional financial institutions the opportunity to compete with faster-moving fintech companies.

Moreover, in financial services, Covid has hastened the adoption of digital transformation, including mobile and remote banking. In a pandemic-mandated stay at home world, consumers made their needs clear. They want integrated services and the ability to connect their financial lives when and where they desire. This requires banks and other finance companies to roll out new capabilities or risk becoming obsolete and losing customers and revenue.

Digitalisation has become a critical business initiative and is increasingly important in financial services. However, without the ability to protect the data being used within these services, financial organisations lose that opportunity entirely. Financial data breaches can cost the business in lost revenue from new opportunities and cause irreparable harm to an organisation’s brand.

Just a single API attack has the potential to wipe out all the gains made from an organisation’s digital transformation.

API Security Incidents Damage Consumer Trust

In financial services, the costs of lost trust can be high. Salt Labs, the research arm of Salt Security, provides ongoing API vulnerability research. In its latest report, Salt Labs uncovered a server-side request forgery (SSRF) flaw on a large fintech platform that provides a wide range of digital banking services to hundreds of banks and millions of customers.

The vulnerability had the potential to compromise every user account and transaction data served by its customer banks. Imagine the leaking of customers’ banking details and financial transactions and users’ personal data or, worse, unauthorised funds transfers into the attackers’ bank accounts.

None of these nightmares came to be, because Salt Labs found the problem before a bad actor did, and all issues have been remediated. But this type of exploit, had it occurred, would have likely caused irreparable reputational damage – not to mention financial losses, theft, and fraud.

The nature of financial services applications is to exchange sensitive financial and customer data, making APIs a high-stakes asset requiring protection.

Traditional Solutions Don’t Deliver Adequate API Protection

Most financial services companies have sophisticated runtime security stacks with multiple layers of security tools, such as bot mitigation, WAFs, and API gateways. These traditional tools provide foundational security capabilities and protection for traditional applications; however, they lack the context needed to identify and stop attacks that target the unique logic of each API.

Attacker activity looks like normal API traffic to traditional tools, such as WAFs, API gateways and other proxy-based solutions. The architecture limits them to inspecting transactions one at a time, in isolation, and beyond rate-limiting. They also depend on signatures to detect well-known attack patterns. If the transaction does not match a known attack signature, the WAF will send it through. Since each API is unique with unique vulnerabilities, signatures cannot help prevent API attacks.

API security requires big data to capture all API traffic and artificial intelligence (AI) and machine learning (ML) to continuously analyse the large volumes of API traffic. Without continuous analysis of API traffic, you cannot understand normal behaviour for each unique API and gain the context required to pinpoint attackers.

In addition, while open banking defines standards around how APIs should be structured to enable predictable integrations and communications, open banking provides no standard to meet the majority of API security requirements. Moreover, basic controls, such as authentication, authorisation, and encryption, fall short of meeting API security challenges.

API Security at the Forefront for Financial Services

APIs have become essential for financial services to meet changing consumer expectations and innovate to remain competitive. At the same time, APIs are now the most frequent attack vector. In the past 12 months, 95% of organisations experienced an API security incident, and API attack traffic grew 681% – more than twice as fast as overall API usage traffic.

Therefore, financial services organisations must put API security at the forefront to protect this growing attack surface. To do so requires dedicated API security tooling for the entire API lifecycle that provides continuous attack surface visibility, early attack prevention, and automated insights for continuous API improvement.

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