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The Many Cyber Security Threats To The Financial Sector
The Many Cyber Security Threats To The Financial Sector
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Some companies may shrug off reputational damage, assuming people’s short attention
spans will leave any lingering resentment in the past. According to a Ponemon
institute’s consumer survey, “Data breaches were up there with poor customer service
and environmental disasters for impacting brand reputation.”
Essentially, cybersecurity breaches ruin reputations. A security breach is on par with
cable company customer service and oil spills with the damage can have on a company.
Financial institutions need to be extra careful as their security reputation is paramount in
comparison with a department store like Target. People expect financial institutions to
utilize the highest grade security possible and information breaches erode that trust over
time.
Obviously, threat
levels for financial institutions are extremely high. Legions of hackers are out
there. Some for their own gain and others at the behest of governments and even private
institutions. There has been much written about the increased use of hacking as a show of
military might. Just recently, Iran and the United States deployed cyberattacks upon each
other. The Washington Post wrote on June 24th,
“Clearly, the threat level for everyone, not just financial institutions, is very high. Then
there’s the vulnerability element. Part of the thrill of working in the financial sector is the
rapid speed of transactions. Enormous sums of money are sent around the world at
lightning speed. Such velocity is vital for businesses to stay successful. However, that
hyper-interconnectivity comes with pros and cons.”
Since everything is connected, that can leave cracks for hackers to slip through.
According to Sam Friedman,
“Many institutions have legacy systems that might not be resilient to cyber-
attacks.” Hackers have also become far more sophisticated than ever before.
No longer are businesses facing a college drop-out in their mother’s basement. Instead,
the threat comes from an army of extremely smart and talented individuals, who are
utilizing cutting edge technology to make a living. The advancement in technology
allows these individuals to launch more attacks than ever before, with zero concern over
the cost of generating such attacks. Now hackers are able to send, literally, millions of
attacks at a single time with the proper delivery system.
RELATED ARTICLE: Cyber Regulations For Banking In Europe vs. America
SWIFT attacks
Another cybersecurity threat that financial institutions must address comes from using
the SWIFT system. The SWIFT messaging system is a system designed specifically for
fast and secure transactions between financial institutions. However, in the past three
years, there have been at least ten security breaches by hackers subverting the SWIFT
system. Hackers were able to access SWIFT credentials and send fraudulent payments
from the bank itself. Initial losses equaled $336 million. However, some of the banks
were able to freeze transactions and recoup a portion of their losses.
Closing Thoughts
A quantitative tractable framework offers financial institutions the best chance to
minimize potential threats. The more proprietary data you can supplement to the
framework, the more effective the security framework will be. In the future, the design
and appraisal of policy changes must be explored. In the cybersecurity world, there is no
such thing as sitting back and enjoying the fruits of your labor. Check out RSI
Security for more information on how you can maintain the cybersecurity of your
institution.