The financial sector is one of the biggest targets for cybercriminals due to the high value of personally identifiable information (PII). This data can include bank account numbers, home addresses, email addresses, income information, and social security numbers. As the number of online transactions increases, so does the risk of cyberattacks. As internet penetration rises and the world shifts towards instant payment schemes, this data is increasingly at risk.
Financial sector cybersecurity challenges
As more financial players move into the digital space, the Financial sector cybersecurity faces challenges. A major obstacle facing financial institutions is the lack of skilled cybersecurity talent. While cybersecurity positions are increasing, finding and retaining talent is still difficult.
In addition to the increased risk of cyberattacks, the industry is faced with implementing new technologies and policies. In addition, compliance requirements add a layer of complexity for information security teams in the financial sector. Furthermore, ransomware attacks and high-profile vulnerabilities are hitting the headlines at an alarming rate.
To address these cybersecurity challenges, financial authorities should prioritize increasing the resilience of their institutions and their customers. This should include ensuring customer accounts are backed up overnight to avoid loss. Regular exercises to simulate simulated cyberattacks can also identify vulnerabilities and develop action plans.
Regulatory requirements
Many regulatory requirements apply to the financial sector to prevent cyber-attacks and protect customer data. In particular, the Safeguards Rule requires financial institutions to develop a written information security policy, conduct risk assessments of each department that handles nonpublic information, and establish a program to secure this data. In addition, the Payment Card Industry Data Security Standard (PCI DSS) is a key regulatory tool that aims to prevent credit card fraud by improving security standards and customer privacy.
Additionally, the Gramm-Leach-Bliley Act requires financial institutions to implement security controls to protect consumer data. This act also requires banks to implement an incident response plan to respond to cyber-attacks and protect their customers’ information. In addition to these federal security requirements, there are a number of local laws that apply to the financial sector.
While cybersecurity regulations are complex and often overlap with other regulations, the importance of meeting these rules cannot be overemphasized. Financial institutions face various security risks due to the sensitive data they manage. When cybercriminals compromise this information, they can engage in financial fraud, monetize it, and engage in other malicious activities. By adhering to the security requirements of these regulations, businesses can increase their chances of success and reduce the risk of cyberattacks.
Threat vectors
Cybersecurity breaches have long been a top concern of financial institutions. These attacks can have far-reaching effects on businesses’ operations and reputations. As a result, IT and security leaders must understand the various threat vectors and how they can best protect the financial sector. A comprehensive understanding of these threats allows businesses to prioritize their cybersecurity investments and plan more effective defenses.
The supply chain is a growing source of cybersecurity threats for financial institutions. These supply chains are complex and interdependent and provide an expansive attack surface for adversaries. In addition, financial institutions often rely on third-party vendors to meet their technology needs. Unfortunately, these vendors often have little control over cybersecurity, which will only become a problem in the future.
Moreover, the financial sector has been the target of some high-profile attacks. These attacks often entail compromising the security of banks and payment portals.
Reputational risk
The financial sector has seen a rise in cyber attacks in the last two years. A financial institution can face reputational risk if a breach or incident negatively views its brand. While most consumers view financial institutions favorably, a recent Accenture survey showed that customers do not necessarily trust their banks to take care of their financial needs. As such, financial institutions must take steps to minimize their reputational risk.
Organizations should consider reputational risk when developing their cybersecurity strategy. This risk can significantly affect an organization’s reputation, potentially affecting customers, revenues, and market share.
