While embracing innovation and meeting customer demands, financial institutions must also manage stringent data protection and cybersecurity regulations. Cyber attacks significantly impact the industry, causing costly financial losses and imposing reputational damage.

Vulnerabilities are often overlooked, but security should be a top priority regarding sensitive data and finances. Learn how to develop a robust cybersecurity strategy by weaving best practices into a holistic approach.

Risk Assessment

Developing an effective strategy in cybersecurity for financial services involves considering various factors, including regulatory requirements, evolving threats, and business objectives. A comprehensive risk assessment will help identify the most critical vulnerabilities, allowing you to take action to minimize them. A risk assessment should start with a clear understanding of the threat landscape and the type of attacks common to your industry. It should also include a thorough evaluation of your organization’s current security infrastructure, policies and procedures.

This includes identifying key data points that could be compromised and the potential impact of those breaches on your company. Once you have a clear picture of the threats to your organization, it’s important to evaluate their intensity. This can be done by creating a risk matrix that identifies different risks, their likelihood of occurrence and their impact.

It is crucial to determine which stakeholders will be impacted by each risk and create control measures to reduce or mitigate its intensity. The most severe risks should be addressed first, and the lowest risks should receive less attention.

Security Strategy

A financial services business must maintain full visibility of its infrastructure to prevent cyber attacks and data breaches. This is especially important with the growth of mobile banking, IoT integrations, and cloud deployments.

The sheer volume of sensitive financial information in the industry makes it an attractive target for bad actors, constantly devising new ways to execute successful attacks. Cybersecurity must be an ongoing effort – not an isolated solution. IT Managers must implement a comprehensive plan to protect against attacks and detect incidents quickly, minimizing disruption.

This includes implementing intrusion detection systems and network segmentation. In addition, they should also conduct regular risk assessments to identify vulnerabilities and update controls accordingly. These include identifying potential security threats, reviewing third-party risks, and providing employee training to ensure they know the latest threats and how to respond.

Finally, they should also assess their supply chain risks and create compliance requirements for vendors, including evaluating their security posture, conducting audits, and requiring documentation. This will help to mitigate and protect the organization from cyberattacks that could impact operations, damage reputation, or cause financial loss.

Monitoring

As the banking sector modernizes, robust security becomes increasingly crucial. With sensitive information stored in digital form, financial institutions must safeguard their systems against cyber threats and fraud. To do so, they must implement clearly outlined data management processes, establish secure in-house Wi-Fi networks, use encrypted storage for all sensitive information, and conduct regular security audits.

Sophisticated cyber threats, including cryptojacking, ransomware, and phishing, are a growing concern for financial services organizations. They can impact a company’s reputation, brand value, revenue, and internal operations. In 2023, the average cost of a data breach for a financial services company is projected to reach $9.44 million, according to research firm Gartner.

As the banking industry focuses on protecting its information from cyber attacks, it must comply with complex regulations that protect consumers and maintain the financial system’s integrity. This requires a holistic approach to security, informed by regulatory insights and threat intelligence. A comprehensive security plan must include incident response and disaster recovery plans to minimize the impact of a cyber attack on a business.

Security Operations

With threats ranging from payment fraud and identity theft to ransomware, data manipulation, and more, financial institutions must focus on security operations. That requires a smarter SOC to monitor activity, detect changes and anomalies, and respond quickly to mitigate risk. Financial services firms must balance their desire to innovate and their obligation to protect sensitive information. The industry must ensure that new technologies don’t amplify existing vulnerabilities or create additional ones.

This includes assessing third-party vendors and suppliers — especially those with the potential to impact the financial sector’s core systems. These include payment platforms, transaction registers, and other critical infrastructure. A serious cyber attack against these systems would undermine public confidence and lead to economic instability.

To manage these risks, a zero-trust (ZT) approach is gaining traction in the financial services sector. ZT shifts access to internal resources away from traditional password-based methods toward a more secure model where team members authenticate with multi-factor authentication and use role-based permissions to access applications.

This approach helps limit the impact of a breach and makes it easier to meet regulatory compliance requirements.

Training

With COVID-19 restrictions, shifts towards remote working, and economic uncertainty, reducing operational costs has become a priority for many businesses, including those in the financial sector. This can result in reduced resources that may impact cyber security efforts. However, the consequences of a data breach in this industry can be severe, costing organizations millions of dollars and ruining their reputation.

CISOs should remember this when creating cyber security goals that maintain business objectives. This will ensure that the business can run while implementing new security measures and that no disruptions occur.

Financial services have valuable data that a robust cybersecurity strategy should protect. This includes customer records, research reports, intellectual property assets and confidential business information. These assets must be identified, prioritized and secured with security solutions to protect them from hackers and internal risks like phishing scams.

In addition, a strong prevention and detection strategy is necessary to prevent breaches. This can be achieved using tools like system information and event management (SIEM) to identify potential risks and vulnerabilities in real-time.