Dominik Birgelen, CEO of oneclick
The financial sector has been a persistent target for cybercriminals. According to research from the Bank of England last year, 74% of respondents claimed cybersecurity attacks to be the highest risk to the financial industry. In fact, 56% considered it to be the most challenging risk to manage.
Financial institutions hold sheer amounts of financial and personal data of millions of users. This means, in a situation of a data breach not only can users lose their money, but also important personal information. In 2023 where data privacy is the primary concern of users, the industry must be prepared to protect data and deal with emerging cybersecurity challenges.
2023: Cybersecurity Challenges Facing Financial Institutions
Technological headways are enabling organisations to securely embrace digital, but they have also allowed cybercriminals to utilise more cultivated techniques to steal data.
Phishing, a technique used by cybercriminals to exfiltrate important data for many years, still remains a preferred method of hackers in 2023. But, high-tech advancements have allowed cybercriminals to make the technique even more sophisticated. Leveraging readily available graphics, social engineering data, and a range of phishing tools – hackers target individuals within organisations to phish. In today’s digital world, these phishing emails look even more legitimate and appear to be coming from an authoritative source – be it someone higher up in the company or a legal authority.
Besides phishing, ransomware is another major threat facing the financial industry. It is a form of malware used by hackers with the motive of demanding ransom. In a ransomware attack, hackers encrypt sensitive data and threaten to publish or block permanent access to it unless a ransom is paid off. These attacks tend to be aimed towards organisations and individuals at a leadership level since they have access to valuable data. Last year, 74% of financial security leaders experienced one or more ransomware attacks, and 63% of those even paid the ransom.
Whether through unique phishing methods or malware, attempts to gain unauthorised access continue. Fintechs need to select their cybersecurity solutions and partners wisely.
Why IT partnerships Are More Crucial Than Ever
In this rapidly evolving landscape where innovations continue to disrupt, IT partners with weak cybersecurity measures can put organisations’ data at risk. Today, fintech companies facilitate many of their services – such as payment gateways, digital wallets, and net banking – through cloud-based technologies. With huge amounts of data flowing through the cloud, advanced cybersecurity measures become essential. This makes the role of technology partners such as cloud providers even more crucial.
It is vital to select a trustworthy cloud provider. However, trust alone may not be enough. Financial organisations must partner with a technology provider that has a track record of delivering services securely and can customise its cloud offerings based on unique business needs. Moreover, fintech firms must also look at whether their technology partner continuously updates its technology stack or not. For example, cloud and cybersecurity providers must regularly update their malware detection software to combat modern cyberattacks.
Minimising the Impact of Human Error
Either through stealing credentials or leveraging phishing techniques, cybercriminals often target individuals to gain access to their systems. According to Gartner, human failure will account for over half of the significant cybersecurity incidents by 2025. However, insider threats also remain a point of concern for financial institutions. These threats often come from employees within a company with malicious intent who use their credentials to harm their organisation.
Fintech companies can leverage zero trust architecture (ZTA) based solutions that treat all users with no trust, and require them to go through the same authentication levels regardless of them being internal or external. ZTA-based solutions further shield organisations from potential consequences of human error and malicious activities of insiders, monitoring users’ activities in real-time. These solutions can immediately terminate granted access in case any suspicious activity is identified. This can help protect data and mitigate risk even if a hacker has gained initial access.
Growing digitalisation is clearly disrupting the finance sector, but in addition to optimisations, this also creates new challenges for cybersecurity. Protecting the sensitive information of their stakeholders, and their customers must be of equal importance for financial companies.
Organisations must identify their specific cybersecurity risks continuously and take a holistic approach towards cybersecurity. In this way, not only can they protect themselves from cyberattacks but also prepare to deal with and manage them in case they occur.
