Cyber Security Requirements for Financial Institutions7 Apr
Financial institutions are one of the most frequently targeted types of business for cyberattacks. This makes perfect sense – pick just about any large bank, credit union, credit card company, or investment firm, and there will be funds to be stolen, extorted, or maliciously obtained through fraud. Hackers even sometimes leverage a financial institution’s assets for political or ideological reasons.
While it’s good practice for any type of business to put safeguards in place against cyber threats, financial institutions must be especially vigilant against all threats. Not only can cybercriminals steal valuable and sensitive information about investors and account holders, but any major data breach is typically big news, and can cause irreparable damage to a company’s reputation. Additionally, pressure from regulatory agencies to protect customer data has never been greater.
The global financial services market – which grew to $22.95 trillion in 2021 – has seen a consistent increase in non-cash transactions over the past few years. With the ever-increasing reach of the Internet combined with proprietary mobile apps, there are abundant opportunities for cybercriminals to strike.
While consumers are generally guarded from losses incurred through cyberattacks on financial institutions, banks comparatively have very little protection from the federal government.
So what can – and should – these businesses do to safeguard against cyberattacks?
For starters, financial institutions need to create innovative, sustainable systems and solutions that will allow for scalable growth. Most accomplish this by outsourcing computing and networking infrastructure. Whether that’s the case or everything is done in-house, these systems must obviously be secure. The process of vetting out third-party vendors and managing those relationships is also critically important.
In addition to helping to build systems, capable and reputable third-party cybersecurity vendors should also be fully up to speed on regulatory compliance standards, and will make sure that your institution is taking the required steps.
Customer convenience is another factor that has to be considered; making your app or software clunky or counter-intuitive to use can be highly detrimental. Remember, apps are supposed to improve the customer experience, not generate frustration! But there are potential pitfalls to avoid when optimizing ease-of-use and total functionality. Technology tends to advance more quickly than the security behind it. Ensuring that customers have access to their accounts and information is critical, but convenience means nothing if the trade-off is risk or exposure.
And then there is the human element to consider. Virtually every study conducted on cyberattacks in today’s age identify human behavior as the “weak spot.” Social engineering, phishing emails, and specifically targeted techniques like spear phishing continue to be the most commonly seen cybercrimes. Suspicious links and attachments are sent and unwittingly clicked or opened by employees, opening up a company’s entire network to hackers.
The best way to stay ahead of the human element is for financial institutions to provide proper training and resources for your team. A bit of awareness and exposure to the types of threats to watch for goes a long way, and many cybersecurity companies will provide regular testing for your staff to ensure that they know what to do when they receive any potentially harmful communication.
Any computer system in 2022 has inherent vulnerabilities, but by and large, the financial industry – with influence from regulatory groups, of course – has led the way in establishing standards of protection. The key is finding the right balance between your customer’s experience and the need to protect their data and information.
Neovera is a leading and trusted provider of professional and comprehensive managed technology services. For over twenty years, our team has integral in providing financial companies with consulting, multiple Cloud platforms (IaaS, DaaS, PaaS, etc.) and cybersecurity solutions, including monitoring, managed services, CaaS, and Identity and Access Management. To find out more about Neovera, let’s Get Started with a conversation.