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How to navigate the top five cyber threats facing financial institutions

Despite continued success with proven methods of cyberattacks, like ransomware, hackers are constantly looking for new ways to breach security. As banks and credit unions continue navigating the risks and challenges of cyberattacks, it is imperative they stay informed of existing threats and emerging trends. Let’s explore several cyber threats that are likely to plague the financial industry in 2022, and ways financial services leaders can combat each risk.

The Ransomware Battle Continues  

For many cybercriminals, ransomware is the preferred method of attack. Ransomware poses little threat to the hacker and provides a speedy pay out for criminals, making it an easy and convenient way to infiltrate a financial institution’s system. Due to these advantages, ransomware attacks continue to increase in frequency, and studies show this trend will continue. According to the National Cybersecurity Alliance, the ransomware global attack volume skyrocketed by more than 150% for the first half of 2021 compared to the previous year.

With ransomware on the rise, financial institutions must remain on high alert to identify and prevent these attacks. If a ransomware attack does make it past prevention tools, threat monitoring and management become paramount for banks and credit unions. A Security Information and Event Management (SIEM) solution delivers insight and control of cybersecurity, providing incident response to any network threats or vulnerabilities in real time. Additionally, a SIEM collects and holistically reviews event logs of devices throughout a technology environment, detecting and remediating any security events.

Many banks and credit unions opt for a SIEM-as-a-Service (SIEMaaS) model to manage the burden of monitoring and reducing costs, both upfront and ongoing. With SIEMaaS, a third party, such as a managed security service provider (MSSP), collects all event logs and sends them to an outsourced SIEM. The SIEM then produces alerts that notify the internal IT team or an outsourced security operations center for investigation, review and response.

Increased Surface Area for Attacks

It’s no secret that hybrid workforces and cloud-based applications have become more common, and this reality has increased organizations’ surface area for vulnerabilities. This surface area extends to any device that can access a financial institution’s network, also known as endpoint devices.

Endpoint devices have been an area of heightened interest for hackers, especially as employees continue to work remotely. Since financial organizations have varying levels of attention for different types of endpoints and many users fail to update patches or protective software, effective detection and response is critical.

By implementing an endpoint detection and response (EDR) solution, banks and credit unions can identify anomalies and block malware using advanced threat intelligence. EDR technology stops the spread of malware in an infected system through detection, isolation and remediation. Additionally, EDR solutions are an effective strategy to protect against zero-day exploits, which are vulnerabilities with no available patches, and serve as a valuable source of information in a SIEM.

A Surge in Cloud-Based Attacks

Many financial institutions are migrating their infrastructure to the cloud, prompting cybercriminals to shift their efforts to cloud-based cyber attacks. Cloud technology offers a variety of security advantages, but when a breach does occur, it is typically the result of a bad configuration.

By partnering with a cloud services provider or MSSP, financial leaders can strengthen the integrity of IT systems. Organizations should leverage their providers’ expertise to better understand the controls that are in place to further mitigate risk. Additionally, institutions should properly vet cloud service providers as part of vendor due diligence efforts.

Prevalence in Social Engineering Schemes

Even with the most sophisticated cybersecurity monitoring tools, employees remain the first line of defense against cyber threats. Unfortunately, employees can also be the weakest link if leaders do not teach them how to recognize various forms of social engineering schemes, such as phishing.

Cybercriminals recognize employees represent a significant risk, which is why they target staff in efforts to gain access to systems and networks. In many cases, an employee unintentionally clicks a malicious link or attachment in an email, allowing a cybercriminal to access their system. To keep employees abreast of emerging social engineering schemes, leaders should make cybersecurity training and awareness a top priority. Utilizing phish simulation testing systems is another strategy to keep employees vigilant.

Growing Threat of Supply Chain Attacks

Supply chain attacks are an increasingly popular method to distribute malware and will continue to plague the financial industry, as cybercriminals use them to target providers, customers and others in the supply chain. A supply chain attack allows a fraudster to compromise distribution systems to potentially create an entryway into the network of the supplier’s customers. In many instances, a fraudster targets a software vendor to deliver malicious code through seemingly legitimate products or updates.

According to the National Institute of Standards and Technology, fraudsters use the compromised software vendor to gain privileged access to a financial institution’s  system and bypass security measures to re-enter the same network. Due to the ripple effect of this cyber threat, credit unions must implement cybersecurity best practices to strengthen their ability to mitigate the consequences when a supply chain attack does occur.

The Importance of Cybersecurity Compliance

As cyberattacks continue to make headlines, regulators continue to place greater emphasis on cybersecurity compliance. By partnering with an MSSP that is familiar with the complex regulatory requirements of the financial industry, banks and credit unions can stay informed on the latest regulations while enhancing their cybersecurity solutions. Moving forward, these organizations should leverage a layered security approach to maximize protection efforts, especially as the cyber threat landscape evolves.

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