Summary of Key Points
- The financial services industry faces significant pressure from a cybersecurity perspective
- The top cyber attacks in the financial industry include phishing, ransomware, DDoS attacks, local file inclusion, and insider threats (users or employees)
- Being proactive to prevent these types of attacks from taking place is critical
The financial industry suffers from more cyber attacks than any other, and that should come as no surprise. After all, cyber attacks are normally motivated by one of two factors: gaining maximum profits or inflicting maximum damage. Targeting a financial institution responsible for massive quantities of private, corporate, or even public funds—like a bank or an insurance company—is an effective way to do both. No wonder the industry now experiences an average of one cyber attack every 10 seconds.
The costs of these attacks are often severe, too. The average cost of a data breach in the financial industry is $5.72 million, according to info from IBM. That means it’s vital for financial institutions to take precautionary measures against likely cyber threats—and to help you, we’ve compiled a list of the most common cyber attacks financial organizations face. Read the list below to learn more about how much these attacks can cost you and how you can prevent them.
Phishing
Phishing attacks rely on fraudulent communications, usually disguised to appear as messages from key partners, clients, or other stakeholders in the organization. In the financial sector, these could appear at first glance to be emails from investors, regulators, or vendors.
Email phishing is the most common kind, where a hacker simply sends a legit-looking email to an employee at a company in an attempt to make them volunteer-sensitive information or download malicious software. But it’s also not uncommon for hackers to use fake links (HTTPS phishing) to direct victims to pages that download malware to their devices and let hackers steal data from them.
- Cost: phishing scams cost the average large organization nearly $15 million each year.
- Collateral damage: phishing doesn’t just cost a company money—it can also result in a loss of intellectual property, disrupt operational activities, and damage the institution’s reputation. Phishing attacks that target company leadership (called whaling attacks) can have particularly devastating consequences.
- How can it be prevented? Improve your endpoint security. When a device on your network is compromised with malware from a phishing attack, you likely only have 10-30 minutes before it spreads to others. Our endpoint detection and response services can isolate your devices as soon as they are compromised and contain the threat until it can be dealt with.
Ransomware
Ransomware is a type of malware that makes a device unusable until the victim pays a given amount of money to the hackers who control it. In a recent poll of financial organizations affected by cyber attacks, nearly 75% reported being affected by ransomware hacks.
- Cost: in a six-month period during the previous year, the US Treasury Department’s financial crimes unit reported more than $5.2 billion in bitcoin payments related to ransomware attacks.
- Collateral damage: ransomware can do more than make an endpoint unusable—it can also give hackers control over the data that endpoint can access. Often, the hackers will threaten to release this data unless the ransom is paid, so ransomware often creates a “Sophie’s Choice” situation where a business is forced to choose between its profits and its reputation.
- How can it be prevented? Hackers often use phishing emails to get ransomware onto your devices, so endpoint protection is important here, too. But adding in frequent vulnerability scanning (which identifies weaknesses in your network security so they can be resolved) and an up-to-date firewall (which blocks unauthorized traffic to and from your network) also play key roles in stopping this common type of threat.
DDoS Attacks
A Distributed Denial of Service (DDoS) attack occurs when a threat actor purposefully overloads your organization’s network with traffic to disrupt normal business operations and potentially divert cybersecurity resources so that other hacks can be attempted with a greater chance of success. More than 50% of reported DDoS attacks are against financial institutions such as commercial banks and payment card processing companies.
- Cost: most credit card companies process thousands of transactions per second, so a successful DDoS attack can cost millions of dollars in lost revenue every minute.
- Collateral damage: during a DDoS attack, an organization’s internal cybersecurity resources are often diverted to fix the disruption in services. During this time, detection time for other threats can increase, making them more likely to succeed.
- How can it be prevented? Knowing how to configure your firewall to block unwanted traffic can reduce the possible areas a DDoS attack can target. Virtual Armor’s managed firewall services can be configured by our experts to make these attacks as ineffective as possible against your network.
Local File Inclusion
These attacks are among the most common kinds of web application attacks in the financial sector, making up nearly 50% of web application attacks on financial organizations in recent years. LFI attacks work by targeting web applications used by financial institutions and attempting to make them display or run files on a server—revealing sensitive data.
- Cost: LFI attacks are often used to make other cyber crimes possible, so the exact costs involved with them can be difficult to pinpoint. However, given that they are commonly used to create data breaches and that the average cost of a data breach in the financial sector this year is $5.72 million, it’s easy to see why they represent a major threat.
- Collateral damage: LFI attacks can open up an organization’s clients who use their web applications to Denial of Service attacks, data theft, and website defacement. LFI attacks can also lead to cross-site scripting (XSS) attacks, where malicious code is attached to a web-based application and affects every person who uses it.
- How can it be prevented? Regular vulnerability scanning plays a vital role in identifying areas where your organization’s web applications can be compromised. Virtual Armor offers vulnerability scanning as an independent service and as part of our SOCaaS option.
Insider Threats
Insider threats occur when someone within your organization is responsible for a cybersecurity threat. This can happen deliberately (malicious insiders), but that’s not always the case—sometimes, employees just make mistakes or don’t have the resources to adequately protect your organization from a potential breach (inadvertent insiders).
- Cost: the average cost of these incidents is upwards of $15 million in 2022.
- Collateral damage: the average financial sector employee has access to over 11 million records on their first day of work. That makes the extent of the damage an internal threat can cause potentially limitless.
- How can it be prevented? Hiring Virtual Armor to provide SOCaaS takes pressure off your existing cybersecurity team and puts the most sensitive parts of your cybersecurity infrastructure in the hands of our trained professionals. Simply put: the more of your cybersecurity we handle, the less of a risk you face from your own employees.
Protect Your Organization from Cyber Attacks
Strong cybersecurity isn’t optional for financial institutions—there’s simply too much to lose. To learn more about how Virtual Armor’s solutions can bolster your cybersecurity capabilities, contact us immediately and speak with a member of our team.
