It’s an unfortunate fact: financial services institutions make a compelling target for cybercriminals.
Research from 2022 shows that the finance and insurance sector was the second most impacted by cybercrime, with 566 reported breaches and 254 million leaked records. Overall, successful cybercrime attacks have cost the sector around $5.9 million—and that was last year.
Cybercriminals are only getting more sophisticated, and unprepared institutions will likely suffer more severe attacks as time passes. Banking service providers have resultantly found themselves posed with a challenge: keeping customer data safe from this ever-evolving threat.
The Cyberthief’s Playbook: Scams, Ransomware, and Phishing
Before diving into best practices, business leaders must have a fundamental understanding of how cyber breaches occur. In most cases, cybercriminals must first be allowed access to your company systems; and while a few are extremely creative in how they go about obtaining that access, garden-variety cybercriminals will use one of many recognizable methods to gain it.
As such, learning how to identify the signs of a potential scam is of paramount importance. Cybercriminals use these strategies because they work exceedingly well on the unaware and exposing their “playbook” deprives them of their power. A couple of the most common include:
- Phishing Sending fraudulent messages to employees to secure sensitive data. Often, phishers will pose as a company contact, an external business looking to connect, or even a purveyor of personal, sensitive services, such as a healthcare provider. These messages are often crafted to instill a sense of urgency and ask your employee to click on a link and input sensitive information. By the time most realize something’s wrong, it’s almost always too late.
- Ransomware: Ransomware often masquerades as legitimate company software and is usually paired with a phishing attempt. When the employee downloads any type of malware program without checking with their superiors first, the cybercriminal essentially gains control over company systems immediately. Ransomware has been a particularly effective strategy in the financial services sector, with over 64% of institutions having been attacked this way.
- Formjacking: An attack where a link to a legitimate website is redirected to a scammer’s form. The employee believes they’re filling out information for a legitimate service, only to have their identity (and perhaps customer information) stolen.
These strategies are effective because cybercriminals can use them with a variety of approaches. They can pose as tech support, credit repair agencies, disaster relief organizations, or even family members. In the age of omnichannel digital service, anything is possible; and so training your employees to be vigilant fraud-detectors is key.
Data Security Best Practices: A Brief Rundown
Now that we’ve defined the threat, how should financial services institutions proceed to become foolproof against data breaches?
The first step is to educate yourself (and your employees) on personal financial data rights and regulations. Data storage and usage regulations may vary from state to state and are constantly evolving, but they typically offer a solid baseline for your cybersecurity initiative.
The second step is mandatory training. Employees are your first line of defense against cyber breaches, and a lack of vigilance on their part can allow cybercriminals access to company systems. As a rule of thumb, your employees should be trained to recognize and avoid anything that resembles a cyberattack, as no response is the best response. Teaching them to follow data storage best practices will keep employees from accidentally compromising sensitive customer information as well.
You can also employ additional layers of defense, such as company-provided antivirus software, limiting software access to company devices only, or enlisting managed IT services. Employees are human and therefore imperfect, and these measures can help prevent breaches or even respond to them if they should occur.
Finally, have a well-defined process in place in case a breach does occur. When a cybercriminal does break through your employees’ defenses, following a breach response process can help mitigate the amount of damage they’re able to do. Breach response processes typically involve taking back access from cyber criminals, analyzing vulnerabilities to prevent repeat offenses, and communicating with the public and law enforcement.
Following these steps will help you insulate your organization as much as possible from cyber threats and empower you to recover quickly if a breach does occur.
Conclusion: Keep it Secret, Keep it Safe
In a McKinsey survey, 87% of customers report that they will not do business with an organization that won’t take steps to keep their data safe. For banks, cyberattacks do more than attack their bottom line; they attack their very ethos. If customers can’t trust your organization to keep their records secure, they’ll go elsewhere.
There’s always some risk inherent to doing business in the digital world and cyberattacks are now so prevalent that most organizations can expect to be targeted at one point or another. But take measures to keep customers’ information safe, and you can position yourself as an organization that consumers can truly, wholly trust.