Financial Services Cybersecurity
The scope and sophistication of financial services cybersecurity threats are growing every day, with a recent survey showing an increase YoY of 67% of breaches. The study also showed an increase in the number of destructive malware attacks on financial enterprises. Despite this, 79% of CISOs surveyed said that cyber criminals are becoming increasingly sophisticated and advanced. Financial institutions must take steps to reduce their exposure to cyber threats and keep themselves and their customers safe.
Targeted cyber attacks on financial services companies are increasingly common, although they were relatively uncommon only a few years ago. The growing sophistication of these attacks can include sophisticated methods such as network intrusion. In a recent report, BAE Systems and the Carnegie Endowment for International Peace outlined publicly known examples of cyber-incidents that affect financial services firms. While these examples are indicative of trends, they are only the tip of the iceberg.
A growing number of breaches have led to reputational damage for many financial service providers. According to IBM X-Force research, nearly seventy percent of all attacks targeted banks and 16 percent of all attacks affected insurance companies. According to BCG research, financial services businesses were 300 times more likely to suffer a cyberattack than other sectors. The growing sophistication of cyber attacks has led many organizations in the financial services sector to be concerned about their security. A survey of top 100 US banks indicated that cyber-attacks on financial services firms ranked as their top internal risk.
Financial services are increasingly dependent on information technology and telecommunications. If the information or systems in an institution are compromised, the resulting impact could disrupt business processes, impair core processes, and undermine customer confidence. The Federal Financial Institutions Examination Council (FFIEC) has issued two statements this year on cybersecurity threats and their mitigation. The statements also present important cybersecurity priorities for the remainder of 2015.
These findings illustrate how important it is for financial institutions to keep their most valuable assets protected. This means tightening access controls and providing employees with a sense of importance. Because employees are often the first line of defense, they must address cybersecurity risks head on. In addition to implementing stringent policies and training programs, financial institutions can use Mindsight to monitor cybersecurity risks and provide peace of mind. By using a cybersecurity solution, financial services can prevent the top threats to their business.
Despite the importance of cybersecurity for financial institutions, they are not prioritizing investments in cyberdefense. Only one-third of firms are deploying AI, machine learning, and automation solutions. The same holds true for cybersecurity investment in new products and services. In addition, only one-quarter are making extensive use of cyber-analytics or user behavior analytics. Despite the growing importance of cybersecurity for financial services, firms are struggling to keep pace with emerging technologies and budgets.
As technology advances, more consumers want frictionless financial services. These services must be secure. Financial services companies must keep pace with the latest cybersecurity technology to protect consumers. As the industry has struggled to keep up with technological advances, they are increasingly vulnerable to cyberattacks. In addition to legacy systems, financial institutions are utilizing new technologies to target them. Newer technologies, such as cloud computing and machine learning, are attractive to hackers.
The new rule requires financial services firms to notify the relevant regulatory bodies in the event of a computer-security incident. Notification is required when an incident threatens the confidentiality, integrity, availability, or availability of nonpublic information. It also impacts the financial services sector because it prevents customers from accessing their accounts. This rule was triggered by computer-security incidents. The new rule is intended to provide early awareness of emerging threats.
Banks need to follow new reporting guidelines for cyber incidents after a recent cybersecurity breach. The Federal Reserve Board, Office of Comptroller of the Currency, and Federal Deposit Insurance Corp. have all requested that banks report such incidents to them within 36 hours. Banks already faced a number of reporting requirements, and the new rules will only strengthen those requirements. Ultimately, the new cybersecurity rule is expected to harmonize these reporting requirements.