Security leaders must foresee and address tomorrow’s cybersecurity challenges to stay ahead of the curve in a rapidly changing digital ecosystem
The ongoing technological evolution propels them to discover new vulnerabilities to exploit. Due to the prevalence of exploitable IoT devices, highly dispersed infrastructures, high-value assets, and the human factor—which continues to be the weakest link in security defenses—financial services organizations are particularly affected by security issues.
The industry must be more proactive regarding digital transformation and future-proofing to ensure attackers are out-innovated. As we advance, there is a need for coordinated action, cross-industry and international collaboration, and policy intervention.
Financial services firms need to take cloud computing, security of the extended enterprise, customer trust, resilience of operations, and closing control gaps more seriously now that remote work and digital transformation are here to stay.
This entails a multi-pronged strategy that includes adopting more advanced perimeter controls, incident detection and response capabilities, risk identification techniques, and employee education initiatives.
While there isn’t a single answer that works for all industry stakeholders, it seems universally true that increased risks will continue to necessitate novel responses. The following are some key realizations, conflicts, and trade-offs that could help fintech be better prepared to deal with cyber threats and that are likely to shape the future of cybersecurity.
Why is cybersecurity challenging in the financial services industry?
The financial services sector is particularly concerned about cybersecurity because, as the saying goes, “that’s where the money is.” Elaborate and sophisticated schemes to steal other people’s money abound in today’s world. Nevertheless, nothing appeals to criminal minds more than electronically transferring money from someone else’s account to their own.
As attacks rise, regulators pay attention and take action to put more pressure on the sector to develop solutions. At the same time, as a significant challenge for the financial industry, regulatory and compliance requirements are the main factor in why customers trust the sector with their money.
In the financial industry, third-party vendors make up a significant portion. The sector is merely a conglomeration of numerous business partners cooperating to appear to offer a coherent set of services. The financial services sector faces a significant challenge in managing vendor risk. Every major, well-known financial service provider employs many smaller businesses that offer a wide range of commercial services. Each business’s selection, auditing, and management add more cyber risk.
Consumer demand for frictionless and cashless financial services is growing. They seek out apps that are both simple to use and safe. With the click of a button, they want to send and receive money electronically, but they also need to protect those transactions from fraud. The need for highly qualified security professionals in the financial services sector is fueled by the fact that it can be difficult for businesses to stay current with the most recent developments in computer and application security technology.
The weakest link in the chain
User error accounts for many successful cyberattacks against financial services organizations. A full-scale ransomware or malware attack typically starts with a successful phishing attack that grants an initial foothold inside an organization.
To establish a foothold, criminals only need to locate one person—preferably one with high privileges—who uses poor password hygiene or who can be duped into disclosing information. From there, breaches and failed audits can occur by ransomware, malware, and other strategies.
Low encryption rates and overly complex essential management procedures, which frequently conflict with one another, contribute to the problem of data loss from breaches.
While cyber resilience training is an excellent first step in reducing this risk, it cannot eliminate the possibility of human error. This is where digital transformation comes into play; contrary to popular belief, which holds that increased reliance on technology can raise risk, in this instance, it lowers it.
Organizations can strengthen their business processes and significantly reduce the risk of attack by integrating technologies like AI and automation to handle processes prone to human error.
Rising attack numbers
According to recent data threat reports, most security leaders in financial services organizations ranked malware and ransomware as the main culprits behind cyberattacks. Unsurprising considering that threat actors can profit considerably from these attacks despite their low cost.
Ransomware has significantly altered the economics of breaches in recent years. Due to the highly regulated nature of financial services, there is a high risk of losing sensitive data and suffering reputational harm due to these attacks. Simply paying the ransom may harm many financial services organizations less than taking additional risks.
Cyberattacks frequently repeat the same attack pattern because financial institutions share the same security flaws. Most of the exposures facilitating data breaches in the financial services industry could be addressed by the security measures listed below:
Also read: All you Want to Know about Big Data in Financial Services
Emerging technologies
Emerging technologies like AI, Blockchain, Quantum, and 5G have the potential to completely change current practices in cyber security in the Financial Services industry as well as ongoing security challenges and the current threat landscape.
For instance, a single, powerful quantum computer might be able to crack the current public key encryption algorithms (cryptography) employed by almost all financial institutions today. It threatens client data, secure websites, customer-interaction software, and the hardware required to authenticate, encrypt, and decrypt payments. It is crucial to note that even for the most skilled cybercriminal, carrying out this attack would take much work.
Given that financial institutions must keep some data for decades, this poses a ticking time bomb as quantum technology advances. Although it may seem like years from now, organizations must start thinking about creating a solid quantum strategy to prepare for these upcoming difficulties.
Using a zero-trust strategy
Organizations in the financial services industry frequently have highly dispersed infrastructures, including physical stores, IoT devices, and a hybrid workforce that can operate virtually anywhere. By ensuring “least privilege” access to widely distributed, high-value data and assets, adopting zero trust principles can be a crucial strategy. Unsurprisingly, organizations providing financial services are less likely to have experienced a breach if they have a formal Zero Trust strategy.
The size, complexity, and elasticity of the underlying networks have all significantly increased due to the transition of standalone devices like ATMs and kiosks with proprietary, dedicated connections to IoT. This has also significantly increased the attack surface. Zero-trust security techniques are typically very effective in these settings.
Organizations will require visibility across their entire organization and infrastructure as they advance. A crucial component of efficiently establishing priorities and carrying out security projects is coming to a shared understanding. Security teams can collaborate to address whatever problems the future holds when positioned in alignment with the core components of the business.
