Cyber Security In Financial Services: Moving Forward

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Cyber Security In Financial Services: Moving Forward

Cyber attacks such as phishing, ransomware and DDoS attacks against the financial services industry have become increasingly frequent and much more sophisticated. In 2016 alone, more than forty five percent of financial services firms reported at least one (with some even recording as high as five) breaches. The hard truth is that these attacks now come from both individual actors as wells as organized attackers, and security teams have to step up and raise their level of scrutiny. Cyber security has become an imperative that no firm can ignore, if it wishes to exist into the future.

Some of the key findings from a 2016 Financial Industry Cyber security Report by SecurityScorecard, helps to put the current state of financial cyber security in perspective. These findings include the following: 1. 75% (three out of four) of the top 20 U.S. commercial banks are infected by malware. In some cases, some are infected by multiple different malwares. 2. Almost 20% (one in five) of financial institutions use an email service provider that has known security vulnerabilities. 3. 95% of the top 20 U.S. commercial banks were graded C or worse for network security.<br />

While banks and other financial service companies are more prepared to handle cyber security threats these days, there are still several challenges. The top threats to the sector today are:

  • Challenges from emerging technology: Distributed denial of service (DDoS) attacks are becoming more prevalent in the sector. In recent times, a DDoS attack hatched from a botnet made up of smart devices within the Internet of Things (IoT) affected many financial service companies. After one of such attacks, the perpetrator publicly released the code used in the DDoS assault, therefore making it available for anyone of a mischievous mind to use. The code, called Mirai, searches for and attacks internet-connected devices protected by default usernames and passwords. Because Mirai is essentially now an open source hacking tool with the ability to tap into millions of unsecured IoT devices and related sensors, establishments in all sectors are more vulnerable to DDoS assaults.
  • Unencrypted data: The majority of data breaches are caused by improper encryption, making stolen data immediately accessible after being stolen.
  • New technology without security: It is becoming increasingly easy to turn devices like CCTV cameras, medical devices, connected cars, and toys into bots if they are unprotected. It is important to remember that more than just a computer hard drive data can be compromised and used against the sector. Every device connected to the internet in one way or the other can be manipulated if not protected. Also, combining cloud services with tools like artificial intelligence and blockchain will introduce new risks, and require new approaches to combating those risks.
  • Third party services: Unprotected third party services can open the door for cyber attackers to acquire more data. Thus, when banks and other financial service players connect services, there will always be that risk of compromise.
  • Being unprepared for new forms of attacks: Attacks are becoming increasingly sophisticated, and do not only delete consumer data or siphon funds from banks. Today, attacks change data, hold it hostage for later use, and manipulate data in many more ways.
  • Unsecured mobile banking: Mobile banking is becoming more popular, connecting millions of unprotected phones and devices. Less complex security systems on mobile gadgets present a field of opportunities for skilled hackers. Encryption must therefore extend into the mobile device space for financial service companies and their customers to remain safe.
  • Nefarious insider challenges: There have in the past been attempts to reach out to insiders to buy their login credentials and to get them to sell intellectual property. This is becoming more of a big problem. Disgruntled employees and insiders tempted by outside influences are being bribed to share inside information.
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