Financial Institutions have a lot to be concerned about, from market changes to reputation damage. However, those concerns pale in comparison to the cyber security issues. Nowadays, there is nothing to be surprised about the data breach occurring in financial institutions. Because of its frequent occurrence, such news have lost most of its shock value. Although every business is prey to cybercrime, financial institutions fulfil the two most important criteria, being maximum revenue and maximum impact, which makes it more vulnerable to such threats. Finance industry keeps highly critical data in digital form which makes it easy for the cyber criminals to obtain and monetize such data. The continuous digital transformation efforts, hybrid work practices and complex regulatory environment adds to the convenience of the cyber criminals.
Challenges in Cyber Security of Financial Institutions: –
Continuous Digital Transformation:
Emerging technologies like cloud computing, Artificial Intelligence etc. are adopted by FI’s to increase information processing and financial analytics capabilities. All of these factors contribute to a rise in cybersecurity risks for FIs and their customers.
Increase in Regulations:
Reliance on technology by Financial Institutions has increased to deliver service to clients, due to which they have to confront with an evolving regulatory environment. Though regulations are useful, complying with them can be expensive and time consuming.
Organization’s risk has increased with hybrid work space combining in-office and remote employees. The attack surface was broadened due to adoption of new technologies that enabled remote access, communication and collaboration which increased complexity of IT systems.
Complex supply chain:
Most institutions rely on third party services providers to fulfil their digital operations. Third party may represent a weak link in the supply chain of cyber security. The target is the software vendors through which the malicious code is delivered to the customers.
Types of Threat: –
The bright spot of past data breaches is that it gives us an understanding of the offensive mind-set of the attackers. This may help build a solid defence against it. Some of them are mentioned below:
Examples of Cyber Crimes in Financial Institutions: –
Management of threats of cybercrime in financial institutions is becoming harder nowadays due to explosion of third party vendors, evolving technologies and frequent changes in regulations. The pandemic has also added to the inconvenience. This becomes critical for the organizations to determine risk and choose a strategy and continually monitor the internal control to align with the identified risk.
It hardly seems fair in a climate of continuous change, the organizations have to face the vulnerabilities and threats which keeps multiplying day by day. But with the help of analytics and communications and risk management tools, the organizations can continue to hold their battle and maintain security across the institution.
(This article represents the views of the authors only and does not intent to give any kind of legal opinion on any matter)