The Rise of Cyber Threats in Online Banking and the Financial Sector

The rise of online banking has been a game-changer in the world of finance, providing convenience, accessibility, and speed to millions of customers worldwide. However, as more people turn to digital banking, the risk of cyberattacks has increased, making cybersecurity a critical aspect of the financial sector. According to the Bank for International Settlements, cyberattacks targeting the financial industry have risen significantly, making it the most targeted sector after healthcare. Banks and other financial institutions are prime targets for cybercriminals due to the vast amounts of sensitive data they hold. In this blog, we'll explore why the financial sector is a target, the most common threats, and how Telesystem can help protect against cyberattacks.

Why Banks and Financial Services are a Target

The financial sector is uniquely exposed to cyber risk. Financial firms—given the large amounts of sensitive data and transactions they handle—are often targeted by criminals seeking to steal money or disrupt economic activity. Attacks on financial firms account for nearly one-fifth of attacks, of which banks are the most exposed. Over the past two decades, the financial industry has suffered more than 20,000 cyberattacks, resulting in losses of over $12 billion, and the situation is only getting worse.

Given that financial data is at the heart of the finance sector, any breach in the system can have far-reaching consequences, crippling businesses and causing customers to lose trust in the organization. Here are a few reasons why this sector is constantly under attack:

Monetary Motivation

Money is the primary motivator for cybercriminals to target banks and financial institutions. The promise of substantial profits and unauthorized access to customer accounts or personal information lures hackers into attacking these organizations. They can use this data to gain customers' trust and trick them into revealing further information or transferring significant sums of money. The potential to access vast sums of money without detection is a powerful incentive for cybercriminals to target the financial sector.

Systematic Impact

A supply chain attack on the financial services sector can cause massive disruption since it forms a key part of the nation’s critical infrastructure. Other attacks, such as a distributed denial of service (DDoS) on a major banking sector organization, can cause severe disruption, impacting logistics, manufacturing, retail, and other daily services. Denying access to payment methods not only erodes public confidence, which can cause reputational damage, but it also affects private and government organizations by rendering them unable to operate normally.

Sensitive Data and Personal Information Stored

The financial sector includes banks, mortgage lenders, investment firms, insurance companies, and other financial institutions that use client data to provide products and services. This data is often sensitive or personal information, such as personally identifiable information (PII), making it a prime target for cybercriminals. This type of data is valuable to hackers since they can use it to create more accurate phishing attempts, threaten to destroy or share data as part of a ransomware attack, or sell the data on the dark web.

Online Transformation

The COVID-19 pandemic significantly accelerated the digital transformation. During this period of lockdown, the demand for online financial services increased substantially. To meet this demand, organizations have adopted new processes, workflows, and technologies. However, this rapid change has coincided with an increase in cybersecurity issues since businesses tend to push forward with technological solutions without considering IT security implications until later. With more individuals accessing their financial information online, hackers and other cybercriminals have more opportunities to attack. From sophisticated malware and phishing scams to insider threats and supply chain attacks, hackers employ a wide range of strategies to breach the defenses of financial institutions.

The financial sector remains a top target for hackers due to the abundance of valuable data, the promise of financial gain, the potential for systemic impact, and the ever-present threat of sophisticated cyberattacks. As cyber threats continue to evolve, it is imperative for banks and financial institutions to prioritize cybersecurity efforts and adopt robust measures to safeguard against cyberattacks. However, the first step towards safeguarding your business against cybercriminals is to have a clear understanding of what exactly these common threats are.

The Most Common Threats

In recent years, cybercrime has increased to the point where it is now objectively considered the biggest threat to the financial sector. As hackers‘ methods have become more sophisticated, it is becoming increasingly difficult to consistently defend against attacks. It is crucial to understand some of the most prevalent cybersecurity risks to the financial sector to protect you and your employees from these risks:

• Phishing: Phishing attacks are one of the most common and significant threats to the financial sector. It occurs when an attacker sends an email or message that appears to be from a trusted source, tricking the user into revealing sensitive information such as passwords or banking information.
• Malware: Malware is a type of software designed to damage or disrupt computer systems. It can infiltrate a financial institution's network and steal sensitive information, such as customer data and financial records.
• Ransomware: Ransomware is a type of malware that encrypts a user's files and demands payment in exchange for the decryption key. Cybercriminals use ransomware to extort money from banks and other financial institutions, threatening to release confidential data if payment is not made.
• Insider threats: Insider threats occur when an internal employee or contractor of a financial institution deliberately or accidentally exposes sensitive data to unauthorized parties. These incidents can happen due to lack of awareness, inadequate training, or malicious intent.
• Third-party risks: Banks rely on various third-party vendors for services such as cloud storage, payment processing, and software solutions. Any security vulnerabilities in these external systems can be exploited to gain unauthorized access to sensitive data. 

Being aware of these types of cyberthreats is the first step in protecting your business. However, cybercrime education should not stop there. Let's explore the ways your business and employees can stay protected all year long.

How To Keep Your Business Protected Against Cybercrime

In today's ever-evolving technology landscape, the financial services industry remains a highly sought-after target for cybercriminals. The Federal Bureau of Investigation (FBI) reported that over 500 million financial records were hacked over the past year alone. This alarming trend highlights the urgent need for advanced security measures. As financial institutions are more valuable targets to cybercriminals than other industries, organizations in the financial service sector are at greater risk. Therefore, advanced security measures are a must-have when it comes to preserving your business's integrity.

To safeguard your organization, Telesystem offers a range of advanced cybersecurity solutions designed to help businesses combat these attacks. Our solutions are tailored to meet the unique needs of each business, as we take pride in providing our clients with comprehensive and proactive support.

So, how exactly can Telesystem help your business stay protected? Let's take a closer look.

Security Awareness Training

It may be hard to believe, but employees are the most vulnerable point in the security chain, with human error accounting for over 92% of security breaches. Though rarely malicious, many employees are uninformed or lack training in security awareness. This means they are attractive targets to social engineering attackers, as it is often easier to take advantage of people rather than an entire network or software. Employees are the first line of defense in any organization’s cybersecurity efforts. They interact daily with a bank’s systems and data; when properly prepared, this makes them uniquely positioned to identify and report potential security issues. However, without the knowledge and skills necessary to recognize and avoid common cyberthreats, employees can inadvertently expose their institution to cyberattacks by clicking on phishing emails, using weak/reused passwords, or downloading malicious software.

The financial sector is no stranger to cyberattacks, with the number of breaches only increasing year by year. And while many financial institutions have implemented robust cybersecurity measures and protocols to protect themselves against external threats, they often overlook the most vulnerable point in their security chain: their employees. Human error accounts for over 92% of security breaches, and many employees lack the training and awareness necessary to identify and avoid common cyber threats. Without this knowledge and skills, employees can inadvertently expose their organization to cyberattacks by clicking on phishing emails, using weak passwords, or downloading malicious software.

Cybercriminals often use social engineering tactics to exploit the trust we have in others. As demonstrated in the 2014 JP Morgan hack, where two former fraternity brothers hacked into the company's systems and compromised the data of 76 million American households, the attackers gained access to the login credentials of a current employee. Today, JP Morgan faces 45 million hacking attempts per day, highlighting the severity of the issue. 

Cybercriminals exploit our greatest vulnerability – our trust in others. Therefore, management and security experts at financial institutions must devote time and energy to ensuring employees understand the cybercriminal toolkit. By providing regular security awareness training, organizations can transform their employees into a human firewall capable of detecting, blocking, and reporting malicious activities in the early stages of attack. Telesystems Security Awareness Training offers weekly programs that enable individuals to identify phishing attempts, fake AI-generated calls, and other deceptive tactics. This training builds the understanding that everyone is a stakeholder in cybersecurity, and it fosters a culture of unity and vigilance among employees. In turn, employees are more likely to spot unusual activity and — crucially — act on it by promptly reporting via the appropriate channels.

It is essential to take a proactive approach to cybersecurity to protect your organization. Instead of relying on yearly training, companies should aim to provide more scheduled training sessions per year to ensure that their employees understand security policies and expectations. By doing so, employees become the first line of defense against cyber threats, ensuring the safety and long-term viability of the organization and its data.

Advanced Email Protection:

In the modern era, the financial sector has become increasingly reliant on email communication, with sensitive and financially valuable data exchanged daily. These online exchanges have made the industry increasingly vulnerable to email-based attacks, with more than 90% of security breaches in the financial industry attributed to email-based attacks. The importance of client trust for this industry cannot be overstated, and a data breach can have far-reaching consequences for individuals and businesses alike.

Take the data breach that occurred at Limestone Bank - now known as Peoples Bank - in September 2023. After discovering unauthorized activity within an employee's email account, the bank filed a notice of data breach with the Attorney General of Maine. The breach resulted in the unauthorized party accessing sensitive information belonging to 47,590 customers, including their names, Social Security numbers, and financial account numbers. The situation was highly distressing for the affected customers, and it ultimately affected their trust in the company. 

To prevent such breaches and protect client relations, a comprehensive email protection solution is essential. Telesystem's Advanced Email Protector offers a strategy that can keep your employees and business safe. The solution guards against spam, email viruses, and malware, as well as other forms of email-based attacks that are frequently overlooked. Additionally, it offers encryption and screening of outbound emails to prevent critical internal information from being mistakenly sent by your staff. With these features, Telesystem's Advanced Email Protector can help safeguard your business's reputation and protect your customers' sensitive data. 

Our comprehensive email security program eliminates the time-consuming task of determining which emails may lead to data breaches. It allows employees to focus on their work without worrying about a potential cyber threat compromising the entire company, enabling the workforce to operate securely and with peace of mind. By investing in Telesystem's Advanced Email Protector, financial institutions can stay ahead of potential threats, safeguard their reputation, ensure clients' security, and build a long-term relationship of trust.

Extended Detection and Response (XDR)

The financial sector is a prime target for cyber attackers. Financial institutions hold vast amounts of valuable information, making them a lucrative target for nation-states, cybercriminals, and other malicious actors. In fact, data breaches involving financial organizations have increased by over 330 percent between 2019 and 2023, so it is unsurprising that financial organizations are unable to keep up with the sheer volume of security alerts pouring into their security operations centers (SOC) daily.

The challenge for financial organizations is to effectively manage and prioritize security alerts while filtering out false positives. However, with an average of 22,000 security events per second occurring in their security information and event management (SIEM) systems, security personnel are often overwhelmed. This leaves more than 20% of security alerts disregarded, leaving the entire organization at risk.

To address this challenge, Telesystem's XDR solution offers a comprehensive approach to threat detection and response. By integrating and analyzing data from multiple sources, including endpoints, networks, and cloud environments, XDR solutions can identify and neutralize even the most sophisticated cyberattacks in real-time. This enables security teams to focus on remediation efforts for actual risks and threats instead of wasting valuable time trying to sort out which alerts are valid, how they might be related, and whether a threat is imminent.

The benefits of Telesystem’s effective XDR solution are clear. It provides the response capabilities to end malicious activity in real-time and makes answering the question "are we under attack" easy. XDR eliminates visibility gaps between security tools and layers, enabling security teams to detect and respond to threats faster and more efficiently. By monitoring traffic throughout the network, potential threats can be spotted no matter where they occur, allowing for faster incident response and better security decisions. With Telesystem's XDR solutions, financial organizations can stay ahead of the curve and keep their sensitive data safe and secure, while also protecting critical customer data, their employees, and business reputation – all of which are essential in an industry where trust is imperative.

Telesystem is Here for Your Business

In today's digital landscape, financial institutions cannot afford to overlook the importance of proactive measures to safeguard their businesses and protect their customers' financial well-being and personal data. Customer trust is paramount in the financial sector and a breach of this trust can have dire financial and reputational consequences. 

At Telesystem, we understand the importance of effective security, which comes down to processes, people, and technology. Our comprehensive approach includes solutions such as Security Awareness Training, Advanced Email Protection, Extended Detection Response (XDR), Endpoint Protection, DDoS Protection and a comprehensive suite of cybersecurity consulting services, designed to help financial organizations stay ahead of potential security threats. By embracing continuous monitoring, collaborative efforts among staff and executive engagement, financial institutions can continue to build trust with their customers and safeguard their financial future.

Partnering with Telesystem means that you can trust us to keep your business safe and secure. We believe that in today's constantly evolving cyber landscape, enlisting expert help is not a choice but a necessity for any forward-thinking business. With our multifaceted protection strategies, you can rest easy knowing that your business is in good hands. Don't wait until it's too late – invest in your business's cybersecurity roadmap today.