The Cyber Threat Landscape in the Financial Sector
The financial sector finds itself at a crossroads.
On one hand, there’s the promise of modernisation and efficiency; on the other, a growing playground for cybercriminals.
Drawing insights from IBM’s latest Cost of a Data Breach Report, which spanned 16 countries, it’s clear that the financial sector bears the brunt of a huge number of the world’s cyber incidents, ranking second globally in terms of damage.
Alarmingly, financial institutions face the steepest costs from cyberattacks. Losses average nearly USD $5.9 million per incident in the sector.
This article aims to shed light on the cyber threats that loom over the financial sector, the impact of these attacks, and the most significant breaches for the sector over the past year.
The Biggest Cyber Threats to Financial Institutions
There’s unfortunately a vast toolkit at the fingertips of malicious actors, but malware stands out as the prime adversary for financial institutions.
Ransomware accounted for 63% of these cyberattacks in the past year, a huge increase from 18% the previous year. Financial institutions also grappled with other malware types such as loaders, remote control trojans, spyware, banking trojans, and data wiping malware.
The last year has marked a pivotal shift in attack methodologies. While social engineering attacks dipped from 47% to 25%, the exploitation of software vulnerabilities saw a significant uptick.
Supply chain attacks emerged as a significant concern for businesses, with cybercriminals leveraging weaknesses in organisations’ supply chains across multiple industries to disseminate malware.
The Financial Toll of Cyberattacks
The economic impact of cyber incidents is staggering. According to IBM, the global average cost of a cyberbreach has climbed by 2.3%, reaching USD 4.45 million.
Financial entities, however, bore a heavier burden, with losses hovering around USD $5.9 million per incident.
Geographically, the US experienced the highest average data breach cost at USD $9.48 million. In contrast, the UK saw a 16% reduction in average costs, falling to USD $4.21 million and exiting the top five most impacted regions across the globe.
The period of time it takes to identify and contain a breach – which averaged 207 and 73 days respectively according to the same IBM report – highlights a critical vulnerability in many organisations’ cybersecurity defences.
This prolonged detection and response time is not just a number; it represents a window of opportunity for cybercriminals to exploit compromised systems, extract sensitive data, and inflict substantial financial and reputational damage on institutions.
Visibility into an organisation’s digital infrastructure is the key to reducing the timeframe of undetected cyber activities.
Without comprehensive monitoring and the ability to detect anomalies in real-time, breaches can remain unnoticed for extended periods, exacerbating the impact and cost of the incident. Herein lies the indispensable value of a Security Operations Centre (SOC) service.
A Security Operations Centre (SOC) acts as the nerve centre for cybersecurity, providing 24/7 monitoring of an organisation’s entire infrastructure, networks, systems, and data.
A SOC employs advanced technologies, including artificial intelligence (AI) and machine learning (ML), alongside a team of cybersecurity experts to continuously monitor and analyse activity and security posture. This constant vigilance ensures that potential threats are identified swiftly, allowing for immediate action to contain and mitigate the effects of any breach.
A SOC service enhances an organisation’s cybersecurity framework by offering:
- Real-Time Detection and Response: Immediate identification of suspicious activity minimises the window for attackers to operate, significantly reducing potential damage.
- Full Visibility: By integrating data from across the digital landscape, a SOC provides a holistic view of a company’s threat environment, enabling more effective detection and analysis of complex threats.
- Expertise and Advanced Technologies: SOC teams are equipped with the expertise and cutting-edge technologies necessary to tackle the evolving threats in financial institutions’ cyber landscape, ensuring that defences remain robust against sophisticated attacks.
- Regulatory Compliance: With increasing regulatory demands regarding data protection and breach reporting, including DORA, a SOC helps ensure compliance by implementing industry-standard security measures and providing detailed incident reports.
The integration of a SOC into an organisation’s cybersecurity strategy is not just an enhancement; it’s a fundamental component that shifts the focus from reactive to proactive defence.
By significantly shortening the time to detect and respond to threats, a SOC service is instrumental in minimising the impact of cyberattacks, safeguarding the integrity of financial institutions, and maintaining the trust of their customers.
The Biggest Cyber Breaches in the Financial Services Sector
Several high-profile incidents underscore the severity of the threat landscape for Financial Services over the last year:
- LockBit Ransomware Attack on BSI: LockBit targeted BSI, one of Indonesia’s largest banks, leaking 1.5 TB of confidential data after the bank refused to pay the USD $20 million ransom.
- ICBC Ransomware Attack: Vulnerabilities in the supply chain of the US arm of ICBC opened the door to a ransomware attack, that disrupted US Treasuries trading. It’s reported that the ransom was paid to restore access and get business operations live in this scenario. Law enforcement does not encourage, endorse, nor condone the payment of ransom demands and it is advised that companies don’t pay ransoms by the NCSC.
- MOVEit Application Vulnerabilities: A zero-day vulnerability discovered in MOVEit Transfer – a secure data transfer application – led to multiple data breaches across several Financial Services organisations, prompting a crucial patch update to be released in June.
- Open-source Software Attacks: A series of targeted attacks on the finance sector came via open-source software, Checkmarx. These attacks highlighted the need for stronger defences to be in place and industry-wide collaboration to further bolster defences.
The financial sector’s cybersecurity landscape is complex and ever evolving. Financial institutions must remain vigilant and proactive in their defense strategies to mitigate the risks of cyberattacks. DigitalXRAID stands at the forefront of cybersecurity, offering unparalleled expertise and innovative solutions tailored to the unique needs of the financial sector.
Our suite of services, including Penetration Testing and Cyber Incident Response Exercising, Cybersecurity Maturity Assessments and Red Teaming are designed to protect your institution from the ground up.
To navigate the digital threat landscape with confidence, contact DigitalXRAID experts today. Let us help you safeguard your financial services business against the cyber challenges of tomorrow.
