Cybersecurity Tactics FinServ Institutions Can Bank On in 2024

The landscape of cybersecurity in financial services is undergoing a rapid transformation. Cybercriminals are exploiting advanced technologies and methodologies, making traditional security measures obsolete. The challenges are compounded for community banks that must safeguard sensitive financial data against the same level of sophisticated threats as larger institutions, but often with more limited resources.

The FinServ Threat Landscape

Recent trends show an alarming increase in sophisticated cyber-attacks. Cybercriminals now deploy advanced techniques like deep fake technology and AI-powered attacks, making it increasingly difficult for banks to differentiate between legitimate and malicious activities. These developments necessitate a shift towards more sophisticated and adaptive cybersecurity measures. Take these industry statistics, for example.

• Financial firms report 703 cyberattack attempts per week.1
• On average, 270 attacks (entailing unauthorized access of data, applications, networks, or devices) occurred in financial services, an increase of 31% compared with the prior year.2
• On average, financial services businesses take an average of 233 days to detect and contain a data breach.3
• 43% of senior bank executives don’t believe their bank is adequately equipped to protect customer data, privacy, and assets in the event of a cyberattack.4
• The average data breach cost in financial services is $5.72 million per incident.5

State-sponsored cyberattacks also pose a unique threat to the financial sector. These attacks are often highly sophisticated and well-funded, aimed at destabilizing financial systems or stealing sensitive economic information. Community banks must be prepared to defend against these high-level threats, which require a different approach than conventional cybercriminal activities.

Similarly, in recent times, there has been a concerning trend where major service providers catering to small-medium-sized banks, such as FIS, Fiserv, and Jack Henry, have become prime targets for cyber-attacks. Targeting these service providers allows threat actors to widen their net and make their attempts more efficient, as compromising a single service provider can potentially provide access to multiple small banks. This underscores the critical importance of strong vendor management governance. Community banks must be prepared to defend against these high-level threats, which require a different approach than conventional cybercriminal activities.

Proactive measures can be taken to overcome the threats facing the FinServ industry. Companies like ArmorPoint provide complimentary Cybersecurity Workshops where they have seasoned cybersecurity experts identify specific security gaps and produce recommendations to mitigate those risks.

Top 5 FinServ Cybersecurity Challenges and How to Overcome Them

1. Advanced Cloud Security Strategies

Cloud computing, with its numerous benefits of scalability, flexibility, and cost-effectiveness, is increasingly being adopted by financial institutions. However, this shift introduces specific security concerns that can be challenging to manage. The complexity of cloud security stems from the need to protect data across diverse and dynamic environments. In the cloud, data often moves across various services and geographies, making traditional perimeter-based security approaches less effective. Additionally, the shared responsibility model in cloud computing can lead to ambiguity in security roles and responsibilities between the cloud service provider and the bank.

To address these challenges, banks must adopt advanced cloud security strategies. This involves implementing comprehensive data encryption to protect data at rest and in transit, and robust identity and access management systems to control who can access what data and under what conditions. Zero-trust security models, where trust is never assumed and verification is required from everyone trying to access resources in the network, are increasingly vital. Understanding the nuances of different cloud environments—public, private, and hybrid—is also key to tailoring security measures effectively.

2. Ransomware: Beyond Basic Defense

Ransomware attacks in the financial sector have become increasingly sophisticated, leveraging tactics like “Ransomware as a Service” (RaaS) to target institutions. The evolving nature of ransomware, combined with the high value of financial data, makes these institutions particularly vulnerable. Traditional defense strategies are often inadequate in the face of such advanced threats, which can bypass standard security measures and encrypt critical data, causing operational disruptions and financial losses.

Banks need to implement a multi-layered defense strategy against ransomware. This includes advanced threat intelligence systems that can provide real-time insights into emerging threats and vulnerabilities. Regular security audits are crucial to identify and address potential vulnerabilities in the bank’s cybersecurity infrastructure. Additionally, proactive threat hunting teams can play a critical role in identifying and neutralizing threats before they materialize, providing an additional layer of defense against ransomware attacks.

3. Comprehensive Vendor Risk Management

Financial institutions increasingly rely on third-party vendors for a range of services, from cloud computing to customer relationship management. Each vendor relationship introduces potential cybersecurity risks, as vendors may have access to or manage sensitive bank data. Managing these risks is complicated by the differing security postures and practices of various vendors, making it challenging to ensure consistent security standards across all third-party relationships.

Effective vendor risk management goes beyond initial security assessments and requires continuous monitoring and evaluation of vendor security practices. Regular security audits of vendors are essential to ensure they adhere to agreed-upon security standards and practices. Integrating vendor risk management into the bank’s overall cybersecurity strategy ensures a unified approach to security, reducing the likelihood of vendor-related security breaches.

4. Regulatory Compliance: Navigating a Complex Landscape

The regulatory landscape for cybersecurity in the financial sector is intricate and constantly evolving. Banks are required to comply with a wide range of international, national, and regional regulations, each with its own set of requirements and penalties for non-compliance. Navigating this complex landscape is challenging, as banks must continually adapt their cybersecurity strategies to meet these evolving requirements.

To effectively navigate this landscape, community banks must develop a deep understanding of relevant regulations, such as the GBLA, PCI DSS, SOX, and more. This involves establishing a dedicated compliance team, or even utilizing a virtual Chief Information Security Officer (vCISO), responsible for staying abreast of regulatory changes and ensuring that the bank’s cybersecurity practices align with these requirements. Regular training and awareness programs for all staff are also crucial to ensure widespread understanding and adherence to compliance requirements.

5. Bridging the Cybersecurity Talent Gap

The cybersecurity talent gap poses a significant challenge for financial institutions. The rapidly evolving nature of cyber threats requires skilled professionals who are up to date with the latest technologies and strategies. However, there is a shortage of such professionals in the market, making it difficult for banks to recruit and retain the talent needed to effectively manage their cybersecurity risks.

Banks must adopt creative solutions to bridge this talent gap. Developing internal training programs can help upskill existing staff, making them capable of handling more complex cybersecurity tasks. Collaborating with educational institutions to develop tailored cybersecurity curriculums can help create a pipeline of skilled professionals. Additionally, leveraging AI and automation for routine security tasks can free up human resources for more complex and strategic cybersecurity challenges, optimizing the use of available talent.

Furthermore, another viable strategy for addressing the talent gap is outsourcing. Financial institutions can consider outsourcing security operations talent, partnering with specialized firms to provide expert cybersecurity services. This approach allows banks to access a pool of seasoned professionals who can monitor, detect, and respond to security threats effectively. Additionally, outsourcing executive-level insights, such as a virtual Chief Information Security Officer (vCISO), can provide strategic guidance and governance to strengthen the bank’s overall cybersecurity posture. By outsourcing specific talent needs, banks can bridge the talent gap more effectively while maintaining a strong focus on cybersecurity excellence.

ArmorPoint has recently released a security maturity self-assessment. Take the 15-question quiz to determine the gaps in your security posture.