Get the Latest Updates Directly

Challenges/Threats for IT Security in the Financial Industry

3 Threats to Financial IT Security. 3 Ways to Fight Them.

March 19, 2019

Clearly financial businesses need to be vigilant and well informed about the prevalence and the reasons behind cyberattacks. Their attention, research, and precautionary measures must be proactive and constant.

How to get ahead of financial hackers.

It’s a sad fact of business, but the financial industry is the most breached data sector, falling victim to cybersecurity attacks 300 times more frequently than other industries. Banks, credit card companies, credit unions, investment firms, mortgage and loan brokers, trusts, and pension funds are targets of cyberthreats quite simply because of the kind of information they need to perform business. Their broad range of interconnected systems processing millions of transactions widens the targets of vulnerability. The cost to these institutions to repair incidents is steadily rising.

Clearly financial businesses need to be vigilant and well informed about the prevalence and the reasons behind cyberattacks. Their attention, research, and precautionary measures must be proactive and constant. Unauthorized account activity is cited as one of the major reasons that people leave their credit unions and banks. Breaches have become a way of life. Offering identity protection and resolution services can help gain customer confidence, but prevention is key.

Knowing the dangers is half the battle.

The U.S. Securities and Exchange Commission has updated guidelines requiring public companies to be more open with customers about cybersecurity risks. Furthermore, most financial services companies have increased data security, including the use of encryption technology.

Leaders should be aware of the following financial services cyberthreats both outside and inside an organization, and can never be too prepared to address risks.

  1.    Threats to Web

Connecting to customers through web applications is critical to financial services. It’s often the main point of contact, and the best way to advertise services and connect to back-end databases. However, web applications that are hosted online open accessibility to hackers. For instance, a hacker can inject SQL statements into a data-entry field, thereby revealing private data.

  1.    Attacks through DDoS

There’s nothing worse than an angry customer. Distributed denial of service or (DDoS) attacks affect websites and applications that slow down or crash due to impaired server performance. Customers unable to access their financial services are left in annoying and dangerous limbo. The impact includes disrupted business, damaged reputations, lost revenue and stolen data.

  1.    Employee threats and risks

It’s hard to believe, but one of the biggest cybersecurity threats to financial services business is its own employees. Unhappy or unscrupulous employees may collude with hackers, either through shared passwords or bypassing cybersecurity protocol. More often, employees are targeted in phishing scams and accidentally share information or download malware. Insider threats can be especially difficult to detect.

How to fight back.

As overwhelming as these threats may seem, financial institutions are becoming more aware and better prepared to address risks and deal with strikes. The following three precautionary measures should be considered by every financial service.

  1. Be prepared. More importantly, always be prepared to pivot and redirect as new threats appear. Have internal data breach plans in place that clearly address policies, procedures and provisions concerning discovery and reporting of breaches, investigation and remediation.Security experts agree that third party contracts are the key to a good IT security relationship.
  2. Utilizing an outside partner can help maximize operational safety with minimal impact on budget, and assure the latest best practices in data security are followed through expert support. Ensure that agreements are strong and all details are crystal clear. It’s also a good idea to make sure a security partner has a verifiable history of reliable service.
  3. Research existing insurance coverage to be sure it provides adequate coverage for a broad range of cybersecurity risks and attacks.

Armed for the future.

Who can determine a hacker’s ultimate goal? Whether it’s to destroy a businesses’ reputation, extort money, or make a political statement, it’s hard to determine. Nevertheless, we know the damage hackers inflict. What’s important is to keep a cool head, implement new tools and strategies, and have a strong plan of prevention. A third-party partner focused on cybersecurity is, without a doubt, the most viable answer to keep financial institutions armed for the future.

You might also be interested in

How to Choose the Best Office Equipment for Your Financial Institution
How Vendor Agnostic Partners Help Solve IT Management Challenges
How IT Staffing Works