Cybersecurity Threats To The Financial Sector and Key Strategies To Mitigate Them
The financial industry faces a unique set of cyber challenges as institutions remain a primary target for cybercriminals aiming to exploit vulnerabilities and access sensitive financial data. With increased reliance on digital tools and data-driven services, the risks of phishing scams, insider threats, and other cyber attacks continue to escalate.
Understanding these threats and building a comprehensive cybersecurity strategy is essential for protecting valuable data, maintaining customer trust, and avoiding business disruptions. Continue reading to explore the five most common cybersecurity threats to the financial sector and techniques on how to mitigate them.
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As your security partner, Applied Tech will create a customized cybersecurity strategy tailored to your business needs. Protect against attacks and mitigate risks with regulated security services.
5 Common Financial Sector Cyber Vulnerabilities
The financial industry remains one of the most targeted sectors for cyber attacks, with criminals exploiting both technical vulnerabilities and human weaknesses. As institutions continue to depend on digital tools to serve their customers, the risk of cyber threats will only increase. From phishing scams to insider threats, each risk can have devastating consequences. Below are five of the most common cyber threats currently seen in the financial sector.
1. Phishing Scams and Social Engineering Attacks
Phishing scams and social engineering attacks are common threats in the financial industry, used to deceive users into revealing personal or financial data. By impersonating trusted entities, such as colleagues, bosses, or company representatives, cybercriminals send emails or other digital communications that ask recipients to update accounts, confirm access, or approve transactions.
Unfortunately, with the use of AI, these scams are becoming more realistic and harder to distinguish from genuine messages. Many times, hackers target financial institutions and their customers as a quick way to access bank accounts or other highly sensitive information.
2. Malware and Ransomware Disruptions
Malware, including ransomware, has become an increasingly popular attack on the financial industry. Malware occurs when malicious software disrupts computer operations, gathers sensitive information, or gains unauthorized access to computer systems. A ransomware attack is a type of malware threat that restricts the victim’s access to their own data or systems until a ransom is paid to the attacker.
These attacks can infiltrate systems through malicious email links or by visiting compromised websites. It’s important to note that in a ransomware attack, some hackers may never restore the affected systems even after payment.
3. Distributed Denial of Service Attacks
In a distributed denial of service (DDoS) attack, cybercriminals aim to overwhelm a network, service, or infrastructure with increased traffic to render it inaccessible to legitimate users. When targeting financial institutions, these threats can disrupt services, cause financial losses, or serve as a distraction while hackers attempt to breach more sensitive systems.
Additionally, if a customer or client cannot access their bank website or account, it will create distrust and frustration, leading to reputational damage. These attacks may not last long, but their effects will be prolonged until you can regain your customers’ trust.
4. Insider Threats and Human Error
Surprisingly, insider threats and unintentional human errors are a leading cause of breaches across industries. Since these threats originate from within the organization, it could be an employee, a contractor, or any other individual with authorized access to the institution’s systems and data. A malicious insider threat can be difficult to address because it comes from individuals with legitimate access who may understand the company’s processes and procedures.
On the other hand, unintentional human error may stem from a lack of training, whether an employee accidentally provides access, clicks the wrong button, or innocently sends sensitive information over an insecure network connection. Whether it’s intentional or not, human error poses a serious threat to financial institutions.
5. Application Programming Interface Vulnerabilities
Application programming interfaces (APIs) are used in financial institutions to enable the necessary integration between different systems and services. However, if an API is not properly secured before integration, cybercriminals can exploit it as an entry point for attacks. As APIs become more popular, hackers increasingly target them to gain unauthorized access, disrupt services, or steal data.
These common risks underscore the evolving cybersecurity challenges in the financial sector. As technology advances, cybercriminals also develop new techniques, making proactive defense strategies crucial. Recognizing and addressing these issues proactively will help financial institutions better protect sensitive data, sustain customer trust, and prevent costly disruptions.
8 Key Strategies for Financial Sector Cybersecurity
Protecting financial institutions from modern cyber attacks requires a proactive, layered security strategy. As attackers continuously evolve their tactics, relying on outdated cybersecurity measures will no longer safeguard your systems. Implementing strong cybersecurity measures and building a resilient IT environment are essential for all financial institutions.
1. Advanced Threat Protection
Advanced threat protection (ATP) combines a variety of technologies and strategies, like endpoint protection, network security, email security, and malicious behavior analytics, to identify and prevent cyber threats. These solutions can provide real-time, accurate threat intelligence paired with automated responses to neutralize threats before they become harmful.
2. Vulnerability Assessment and Penetration Testing
A core strategy that all financial businesses should adopt in their cybersecurity efforts is vulnerability assessment and penetration testing (VAPT). This comprehensive process aims to detect weaknesses and assess the overall security posture of your IT infrastructure. In the financial sector, VAPT helps secure critical data, prevent data breaches, and meet regulatory compliance requirements. As a proactive cybersecurity approach, it allows you to identify potential threat areas and close security gaps before they are exploited.
3. Security Awareness and Employee Training Programs
Even with the best security measures in place, if users are not informed on how to safely operate their tools, they could cause harm. Cybersecurity awareness training educates users about the numerous threats and best practices specific to your tools and industry. Employees in the financial sector should be well-versed in the protocols needed to protect sensitive information and financial data. Security training should be held regularly and be paired with helpful resources, additional support, and open communication to ensure every employee is confident in using their digital tools.
4. Regulated Security Compliance
Adherence to industry-wide standards and regulations like SOC2, FFIEC, and PCI DSS is vital for financial institutions to maintain customer trust and avoid legal issues. Compliance with security regulations ensures that internal and external systems and processes meet these standards, helping businesses prepare for audits, strengthen security defenses, and reduce threats.
5. Internal Business Controls and Access Management
Establishing strict guidelines for approving sensitive actions, such as changes to direct deposit information or granting elevated system permissions, is crucial for preventing unauthorized access and potential fraud. Implementing strong internal controls and access management processes ensures that sensitive requests are carefully reviewed and authorized through secure procedures.
6. Secure Remote Access and Endpoint Management
Securing remote access and managing all endpoints has become more crucial in cybersecurity as more employees work from home. Using secure VPNs, multi-factor authentication, and device management strategies helps prevent unauthorized access and data breaches.
7. Data Encryption and Secure Communication
The most effective way to protect data and confidentiality is through data encryption, which renders all information unreadable to unauthorized users both during transmission and at rest. Without encryption, your data becomes vulnerable to cybercriminals who can infiltrate your systems, leak sensitive information onto the dark web, or launch additional attacks. This is especially critical in the financial industry, where you handle sensitive customer information like SSNs, financial data, and personal details that could be targeted by future threats.
8. Incident Response Planning and Testing
Building and regularly testing comprehensive incident response strategies is essential for financial businesses to respond quickly and effectively to security breaches or suspicious activity. With a clear plan in place, you can minimize operational disruptions and help meet regulatory reporting obligations. Proactively developing and testing protocols for incident responses ensures minimal downtime, enhanced security, and reputational protection.
Adopting these strategies will help financial institutions strengthen their defenses against an increasingly complex threat landscape. Proactive measures and continuous monitoring work together to mitigate breaches and lower risks. Combining these technical strategies with employee training builds confidence within your team that they can operate their tools correctly without risking themselves or clients. A holistic cybersecurity approach is vital for staying ahead of cyber attacks and protecting data.
Get Regulated Security
As your security partner, Applied Tech will create a customized cybersecurity strategy tailored to your business needs. Protect against attacks and mitigate risks with regulated security services.
Avoid Financial Cybercrime with Applied Tech
In the financial sector, seemingly small vulnerabilities can quickly escalate into dangerous cyber threats, from insider breaches to malicious phishing scams. A proactive security approach is essential. At Applied Tech, we provide our regulated security services to give businesses access to customized security solutions that not only protect their operations but also help maintain compliance, ensure systems are current, offer ongoing support, and implement proactive measures to reduce future risks.
Focusing on prevention, our security services are designed to protect your business from emerging financial threats. Partner with Applied Tech today to secure your data, earn customer trust, and reduce the risk of sophisticated cyber threats.
About Applied Tech
Applied Tech is a leading IT and cybersecurity services provider dedicated to helping businesses protect their digital assets. Our proactive and strategic services include cloud management, security, productivity, and IT growth strategy. With a team of experienced professionals, we provide unique solutions tailored to your IT needs.
Protect your business with Applied Tech’s fully managed IT services, co-managed support, and security assistance. With IT services focused on your business goals, keep your team productive and your data secure.
