The financial services industry houses vast amounts of sensitive information hackers would love to steal. This can include everything from personal health information to login credentials.
This data allows cybercriminals to steal money and other assets, which is why banks need strong cybersecurity. They must also comply with rules and regulations to avoid fines and reputational damage.
Protection of Customer Assets
As the saying goes, “That’s where the money is.” For hackers, financial services companies hold a treasure trove of information that makes them an attractive target. They are one of the most attacked industries by cybercriminals because of this, and data breaches in this sector can have disastrous consequences for consumers.
With the increase in cashless transactions, a breach of cybersecurity in the financial industry can lead to an interruption of service that could cost customers hundreds of dollars or more. It can also impact the company’s reputation. The good news is that cybersecurity providers can help financial firms protect their customer data and avoid costly downtime.
To do so, they must understand the challenges financial services face in strengthening cybersecurity. First, they must address the fragmentation of initiatives to reduce threats and ensure their effectiveness. This includes creating bundled offerings that cover hot-button use cases and focusing on outcomes rather than technology.
Second, financial institutions must create and implement continuous security awareness programs to avoid the risk of consumer fraud and unauthorized access to their accounts. These include educating employees about the threat landscape, implementing detection and response tools, and delivering ongoing training to protect data. Then, they must work to improve the cybersecurity talent pool. A lack of qualified professionals can result in unintentional gaps that cybercriminals can exploit.
Protecting Data
The financial services industry is a big target for cybercriminals. Not only are there huge sums of money to steal, but a lot of sensitive information about consumers and businesses is also available on the web. It’s no surprise, then, that banks suffer from high rates of hacking and other cyberattacks.
This is particularly true in low- and middle-income countries, where the push for greater financial inclusion has made many leapfrog traditional banking systems for digital alternatives. While such digital technologies offer a powerful tool for advancing economic growth, they can also provide an appealing target-rich environment to hackers trying to exploit the growing numbers of cashless transactions.
These new technology platforms make it easier for people to shop online, conduct business with other companies, and manage their finances from their homes or smartphones. However, heightened technology makes the systems vulnerable to attack, creating a vicious cycle of threats and attacks.
To counter this threat, financial institutions must bolster their defenses. This includes implementing continuous security awareness programs, providing security tools to protect employees and consumers, and regularly reassessing their threat models for more effective prevention strategies. It’s also important for them to invest in a cybersecurity infrastructure that is scalable and designed to evolve with the industry’s needs.
Increasing Customer Trust
Cyberattacks in the financial sector can damage a business’s reputation, and that’s not something to be taken lightly. The best way to protect your business’s reputation is to increase customer trust. Consumers will only share their personal information if they trust the company they are dealing with. Otherwise, they will go elsewhere. Enhancing cybersecurity is a great way to build this trust.
As the gatekeepers of customers’ PII, financial services companies are especially vulnerable to cyberattacks and must abide by various regulatory compliance requirements. Consequently, cybersecurity teams in financial institutions must constantly be on the lookout for new threats. This is an important part of operational resilience and can be accomplished through various means, including partnering with a managed security service provider or conducting a risk assessment.
Moreover, financial institutions must be vigilant about detecting suspicious transactions. They must also incorporate technology such as machine learning algorithms to detect anomalies that could indicate fraud. These tools can analyze how bank account holder uses their computer and mobile devices, allowing them to recognize unusual activity and notify the user.
Another factor that ties into this is that banks must report any incidents that may impact the stability of the United States financial sector. This includes data breaches and distributed denial of service attacks. Fortunately, these regulations are helping improve the overall security level in the banking industry.
Increasing Efficiency
Financial services organizations store a lot of sensitive customer data. If this data is lost, it can lead to identity theft and financial fraud. This can also damage a company’s reputation and impact profits. Therefore, cybersecurity teams need to use tools like biometric authentication and artificial intelligence (AI) to prevent such incidents from occurring.
Another challenge is that hackers continue to target the financial industry. They are looking for a way to gain access to personal information (PII), which is why so many financial services companies invest in technology that can detect suspicious activity. For instance, if someone tries transferring funds from their bank account to another person’s, the technology will alert the account holder that an unauthorized transaction may occur.
In addition, many financial services companies are dealing with the global cybersecurity skills shortage. Many rely on third-party vendors to help with their cyber security needs. This can be a risk because hackers know these third-party vendors aren’t as secure as the financial services company.
Lastly, many financial services companies are trying to become more efficient. This involves reducing their manual processes and implementing new technologies. However, this often leads to security gaps that hackers can exploit. Therefore, security teams must use penetration testing and red team — blue team exercises to identify these vulnerabilities and train their staff to respond to attacks.
