For more than five years and counting, the financial services industry has been the primary target of cyber attacks. In fact, it's not a close competition — financial services firms are 300 times more likely to suffer a cyber attack than other companies. Unfortunately, the frequency, sophistication, and severity of these attacks are only increasing, making it a growing concern for the industry.
To combat these threats, it is crucial for those in the industry to understand the types of cyber risks they face and take the necessary measures to protect their firms. This requires a deep understanding of cyber attacks and their methods to develop effective defense strategies. If you are a financial services company without a cybersecurity risk management plan in place, here's what you need to know.
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Cyber attacks are a type of digital assault performed by individuals or groups who are using computers to attack one or more computer systems or networks. Malicious actors can use many different techniques to gain access to sensitive information or systems. Botnets, malware, malicious emails, hacked social media accounts, and denial-of-service (DDoS) attacks are all common tools of the trade for cybercriminals.
The scale of the crime can range from scams for petty sums of money to devastating attacks that have a lasting economic impact, such as the one described here that cost an engineering firm in NYC $50,000 a day (not to mention irreparable damage to the company’s reputation). Either way, something as seemingly harmless as opening an email can launch a crisis without proper cybersecurity precautions in place.
It may seem counterintuitive, but not all cyberattacks on financial institutions are motivated by money. In reality, there are a variety of motivations that can spur a malicious actor to commit cybercrime. Here are a few of the main types of attackers that could threaten your company’s cybersecurity:
Financial impacts are really only the tip of the iceberg when it comes to cyberattacks. If your company were to fall victim to an adverse cyber event, impacts could potentially take the form of:
This is still only a partial list. A worst-case scenario could cost your firm its livelihood (as in the case of IP theft) and close the company down. The reality is that 42% of small businesses have experienced a cyber attack within the last year.
Why is it, then, that more than a quarter have yet to put precautionary cybersecurity measures in place? Part of it comes down to not knowing what you don’t know. It’s important to understand exactly what kinds of risks are out there — and what it takes to combat them.
In the popular imagination, cyber attacks are often thought to be elaborate schemes in which hackers painstakingly break into a system with flashy gadgets in some dark command center and take control. The reality is a lot more subtle.
Many cybersecurity risks are realized simply because friendly users lack awareness of the threat and offer up access to the system (or a personal profile, a login, or other sensitive data) freely and unknowingly. Here are three of the most common forms of cyber attacks that threaten financial services companies:
Of the three, 94% of attacks against the financial services industry are forms of web application attacks such as SQL Injection (SQLi), Local File Inclusion (LFI), Cross-Site Scripting (XSS), or OGNL Java Injection. These attacks allow malicious actors to take over accounts and gain unauthorized access to sensitive data, and they’re always happening somewhere. In fact, attacks like these occur more frequently than once a minute.
This underscores the importance of financial services cybersecurity. A robust cybersecurity risk management plan (and a recovery plan in case of a breach) must be implemented to protect your company.
One of the first steps in cybersecurity risk management is to take a hard look at your gaps and vulnerabilities. Unless you’ve already cultivated a culture of security, your financial services company may not (yet) be able to answer yes to all five of these critical questions:
Initiatives like security awareness training and phishing testing are great tools to support your goal to avoid cyber extortion. However, they’re just the beginning. Truly creating a culture of security will require a detailed cybersecurity risk management plan that incorporates a combination of risk assessments, a compliance framework, and a security program.
The best cybersecurity defense will involve as many layers as possible. A formal risk assessment is a great launching point, and further, periodic risk assessments should become a part of your company’s cybersecurity routine. A certified cybersecurity professional should complete such assessments on a regular basis.
The results of the assessment will help you to identify the precise strategies necessary to achieve regulatory compliance and peace of mind. Many key elements can come into play when monitoring and maintaining cybersecurity risk levels, such as:
The Federal Trade Commission (FTC) first established the Safeguards Rule in 2003 to ensure the protection of consumers' personal information. The Rule was updated in 2021 to reflect advancements in technology, and businesses are now required to comply with these updated standards. The deadline to meet these requirements was recently extended by the FTC to June 9, 2023. All non-banking financial institutions (including some financial services companies) are included in the Rule.
This means there’s a real urgency to get your cybersecurity risk management program up and running. It can take months to implement all of the necessary steps to fully comply with the updated Safeguards Rule, and the penalties for non-compliance are stiff — potentially exceeding $43,000 per violation per day.
The FTC requires that you:
You can learn more about these requirements in our business owner’s guide to the FTC Safeguards Rule. It’s crucial to get started as soon as possible so that you don’t risk non-compliance. The fastest and most reliable way to begin is to bring on a certified expert in cybersecurity or a qualified managed security service provider to lead and guide you through the process.
A managed service provider (MSP) is more than just IT support — it’s a holistic solution that helps your company to mitigate cyber risks and improve cybersecurity through a variety of ongoing and continuously optimized strategies. Not all MSPs are equal, however. The ideal partner combines key qualities like CISSP, CCISO, and Security Plus certifications, sufficient experience, reliable response times, and a transparent approach.
CyberTeam is an established team of experts in the cybersecurity industry with over twenty-five years of experience offering professional services to protect financial services businesses from cyber attacks. Our capabilities include compliance, risk assessment, IT, and cybersecurity. With a team of experienced experts and the latest technology, we’re able to provide the risk management solutions you need to effectively safeguard your company's assets and confidential information, allowing you to concentrate on growth.
If you’re interested in exploring our managed services, start by scheduling a risk assessment to evaluate your cybersecurity weaknesses. In the process, you can also learn about the personalized solutions that will get your business safely on track for compliance with the FTC. Let’s talk — there’s no time to waste.