Why Cyber Attacks are the Biggest Risk to the Financial Sector?

According to Statista, data breaches in the financial sector have surged dramatically in recent years. Between 2019 and 2023, the number of data compromise incidents involving financial institutions increased by over 330 percent. One of the most significant breaches occurred in 2019 when First American Financial Corporation exposed over 885 million personal and financial records, making it one of the largest financial data leaks in history. Financial cyberattacks continue to pose a major threat, with monetary losses ranking as the second-highest globally, trailing only the healthcare industry for the third consecutive year.

BBC has reported that in the year 2018, the number of reported cyber-incidents has increased from 69 to 819 from 2017, thus, marking a 1000% increase in these attacks. In 2019, more than half of the British firms have reported cyber attacks. According to BBC, the cost of these attacks has seen a 61% surge from $229,000 to $369,000.

Why do cyber-attackers target finance industry?

The reason behind the financial sector being the biggest market for cyber attackers is because these firms hold huge volumes of personal as well as financial data, which is incredibly valuable for cyber criminals. This abundant financial data includes cryptocurrency portfolios, investment details, bank account details, etc. Therefore, the probability of monetary gains in targeting the financial sector is very high.

Cyber Attacks on Financial Institutions in 2019

According to the April 2024 Global Financial Stability Report, the risk of extreme financial losses due to cyber incidents is rising. These losses have more than quadrupled since 2017, reaching $2.5 billion. Beyond direct financial damage, companies also suffer indirect losses, including Reputational damage, Regulatory enalties and Increased security expenses.

What is the Importance of Cyber Security?

A cyber attack can inflict irreparable damage to an organization’s reputation and can cause customers to lose trust in its business. With financial loss as well as reputational loss, organizations can even lose their entire database, sensitive data as well as information.

How can Financial Organizations Protect Themselves Against Such Threats?

With the appropriate cyber security awareness training, organizations can prevent themselves against probable cyber attacks that otherwise, might have devastating outcomes. This includes:

• Undergoing periodic vulnerability assessment and penetration testing (VAPT) on a regular basis.
• Limiting administrative access to only those employees who have an actual requirement.
• One of the most effective methods to enhance cyber security is to conduct cyber security awareness and training for employees on a regular basis. With the help of cyber attack simulator and awareness tools such as ThreatCop. The tool ensures that employees face the simulated attack, learn about the attack vector, and can identify upcoming cyber attacks.

With proper adoption of the mentioned cyber security measures, organizations become better at defending themselves against every possible cyber threat and thus protect their cyber infrastructure.