In 2022, more than 60% of global financial institutions with at least $5 billion in assets experienced a variety of cyberattacks, according to a new survey by Contrast Security. This alarming figure highlights the ever-increasing need for managed IT services for financial institutions, including hedge funds.
As cybercriminals constantly refine their tactics and become more sophisticated, financial organizations must stay ahead of the curve to protect their critical data and assets. To do this effectively, understanding the current cyber threat landscape is crucial. Below are some of the primary threats and challenges financial institutions face today.
Destructive Attacks and Ransomware
Destructive attacks and ransomware have become even more significant risks to financial institutions, threatening data integrity, finances, and reputation.
According to VMWare, in 2022, 63% of financial institutions reported an increase in destructive attacks, which caused irreversible damage to data, systems, or networks, up from 17% the previous year. In addition, these attacks often destroy evidence or act as retaliation, making them a significant concern.
Ransomware, malicious software that encrypts data until a ransom is paid, has also surged. In 2022, 74% of financial sector security leaders experienced at least one ransomware attack, and 63% of victims paid the ransom to regain data access.
Advanced Phishing and Credential Theft
Phishing and credential theft continue to threaten financial institutions and hedge funds as cybercriminals use increasingly sophisticated techniques to access sensitive information. Advanced phishing campaigns now employ social engineering tactics, making them more targeted, successful, and profitable.
Credential theft is a pressing concern, with 19% of data breaches linked to stolen credentials. This highlights the importance of employee education and multi-factor authentication implementation for financial organizations.
Nation-State Level Attacks
Financial institutions and hedge funds face increasing threats from nation-state cyberattacks, which aim to disrupt the financial sector, steal sensitive information, or achieve geopolitical goals. These attacks often use advanced persistent threats (APTs) to infiltrate networks stealthily and maintain a presence over time.
The consequences of such attacks can be severe, including financial losses, reputational damage, and potential destabilization of the financial sector. In some cases, attackers may also manipulate financial markets or undermine economic systems.
Regulatory and Investor Demands
The evolving threat landscape has led to increased concern from regulatory bodies and investors about the cybersecurity posture of financial institutions and hedge funds. Stricter controls and transparency demands emphasize the need for robust cybersecurity measures.
Regulators are implementing stricter rules, and firms can face the consequences without suffering a cyberattack. In 2022, the SEC fined JP Morgan Chase & Co., UBS, and TradeStation a combined $2.5 million for deficient customer identity programs.
Investors also demand greater transparency around cybersecurity practices, as breaches can impact short- and long-term losses, emphasizing the importance of robust measures to maintain investor confidence and attract capital.
Island Hopping and Supply Chain Attacks
Island hopping attacks involve breaching a target organization through one of its trusted partners, while supply chain attacks exploit vulnerabilities in a company’s partner or vendor network.
Both methods pose significant risks to financial institutions and hedge funds, leveraging business interconnectedness to infiltrate multiple organizations. With supply chain attacks increasing by 742% in three years and island hopping attacks rising by 58% in 2022, these sophisticated techniques are becoming more prevalent.
Mobile and Application Attacks
As mobile device and application usage grow in finance, so does the risk of cyberattacks targeting these platforms. Financial institutions and hedge funds must be vigilant to defend against threats like malicious apps, spyware, remote access trojans (RATs), and application-based attacks that jeopardize sensitive information and disrupt operations.
Application security requires organizations to prioritize regular updates, conduct thorough security assessments, and address identified vulnerabilities, preventing unauthorized access, data breaches, and financial loss.
Protecting Your Financial Institution from Cyber Threats
Adopting effective cybersecurity measures is crucial for safeguarding your financial institution from cyber threats. Here are some strategies to implement:
- Combine monitoring technologies: Merge different security monitoring systems for swift threat detection and response.
- Segment access: Limit access within your organization, making it harder for intruders to navigate and reach sensitive data.
- Prioritize risks: Automate the process of identifying and addressing high-priority security risks.
- Deploy decoys: Distract intruders with fake information, shielding valuable data from theft.
- Control applications: Block unauthorized changes and defend against malicious software and cyberattacks.
- Secure work processes: Establish security measures to minimize vulnerability and protect against emerging threats.
- Perform regular threat hunting: Conduct weekly searches for suspicious activity on devices to prevent undetected system access.
- Integrate security into development: Incorporate security throughout your institution’s software development process.
- Restrict administrative access: Grant administrative access only when necessary, reducing cyberattack opportunities.
- Maintain data backups: Regularly back up crucial data for prompt restoration in the event of a cyberattack or ransomware.
Maximize Your Defenses with SeaGlass Technology’s Managed IT Services for Financial Institutions
In today’s increasingly complex cyber landscape, having a trusted partner to help you secure your financial institution against cyber threats is vital. SeaGlass Technology delivers managed IT services tailored to financial institutions, providing comprehensive solutions designed to strengthen your defenses and safeguard your organization.
When you work with SeaGlass Technology, you gain access to experienced professionals who understand the distinct challenges financial institutions face. Our team will work closely with you to deploy the most efficient cybersecurity strategies, including regular monitoring, risk prioritization, and application control.
With SeaGlass Technology’s managed IT services, you can concentrate on your core business while we handle the crucial responsibility of securing your financial institution’s digital assets. Reach out to our team of experts today at 212-886-0790 to discover more about our managed IT services for financial institutions.