Understanding Cybercrime Against Financial Services Companies

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In today’s world, cybercrime is one of the biggest threats facing businesses, and that is especially true for Financial Services companies. The first step to avoid and handle this threat is understanding it well and having the correct tools to mitigate it. This article will give you a bit of both, focusing on what you as a business person must know and avoiding the technical jargon.

We have other articles focused on cybercrime and Financial services companies, some of which can be seen right below. If you’re looking for specialised assistance, please don’t hesitate to get in touch.

Read:
Why are Risk Assessments non-negotiable for Financial Services Companies?
Making Cyber Security Awareness Second Nature

Why is Cybercrime Such a Big Deal for Businesses Today

We live in an era where technology connects and drives the world, so it only makes sense that crime would also eventually migrate from the physical world into the digital realm. Wherever there are people, businesses and money, criminals will find a way in. And unfortunately, technology has been a powerful enabler for people with nefarious purposes.

Cybercrime is an increasingly big deal for several reasons. The sheer proportion of cybercrime makes it so that it is much more likely today to be struck by a cyberattack than to face a natural disaster or a recession. And when global events or tragedies do happen, criminals have shown they’re also willing to take advantage of it, as we’ve seen in the tremendous rise in cybercrime during the Covid 19 pandemic. Numbers are so high because of the low risk posed to cybercriminals and the scalability of attacks due to their advanced tools. Most of these tools are also sold online, so even people without advanced technical knowledge can become cybercriminals.

The fact that companies – especially SMEs – are not yet adequately protected increases the impact of cybercrime. Depending on the severity, a cyberattack could end your business. That is, if you’re not prepared, which if you’re reading this article, will not be the case!

Most organisations don’t see the need to invest in cyber security and believe that having Antivirus software is enough. This is not true for any industry that relies on technology. Businesses need to step up and invest in a solution that will cover all their vulnerabilities, including email protection, network monitoring and user training. For Financial services companies facing cybercrime, this standard must be even higher! Learn why in the next section.

Why do Financial Services Companies Require a Higher Standard of Protection?

Cybercrime against Financial Services companies is even more of a big deal than against most industries. Businesses and individuals who deal with finance are continually among the primary targets, and that shows no sign of changing in the future.

Criminals can benefit in many ways from a company, from stealing their data to using their computing powers to mine cryptocurrency. In fact, most cybercrimes do not cause direct financial damage. Still, if they can go directly after the money, why wouldn’t they? Even if they can only steal data from your customers, that data may include payment and bank account details, which is a goldmine they can exploit.

That’s the main reason why cybercrime against financial services companies is always on the rise. And it by itself is enough reason to be extra careful against criminals. Moreover, there are also relevant points to be made about compliance and the damage potential faced by these firms.

Compliance Requirements

Because the finance industry deals with such sensitive information and handles a significant amount of money, regulations are tighter and better enforced than in most fields. Today, most compliance regulations are also concerned with the cyber integrity of these firms and will verify that their processes and numbers are secured in their physical and digital workplace.

So if a breach does occur, a business in finance will not only deal with the damage caused by the attack itself but will also be judged to establish if it had done enough to prevent such attack in the first place. And if the answer is no, the company may have to pay fines and offer compensation for their customers and stakeholders. Companies that do not take cybersecurity seriously could be doubling their losses and facing tremendous risk.

Link: Compliance Standards: Is your Business Ready for HIPAA and PCI-DSS?

This serves as another powerful stimulus for financial services companies to have an adequate cyber security suite, with multiple layers of protection in place. Doing that will ensure the company is resilient against cybercrime and audits.

High Damage Potential

Financial services companies get no slack when it comes to cybercrime. Any minor attack or breach has the potential to cause enormous damage to the organisation and its stakeholders. A company operating in another industry may not worry too much over a data leak, for example, if it doesn’t store sensitive and financial information. That is not the case for people and businesses handling finance.

Every hack and attack is significant, so there’s no room for error. And if something does occur and word goes around, reputational damage could be catastrophic. People don’t want anything less than safe when talking about their finance. For these reasons, having a robust cyber security strategy is vital for a financial services business.

Common Types of Cybercrime Against Financial Services Companies

As mentioned in the beginning, the first step to avoiding these threats is learning how they work. These are the most common types of cybercrime employed against Financial Services companies:

Phishing & Social Engineering

This is a common technique used by criminals which can bypass many security tools. It involves tricking the user into clicking a malicious link or downloading a file using social engineering. A well-written text containing some doses of persuasion and urgency could easily fool an unaware user. Once the person falls for the bait, the criminal may open a backdoor into the user’s machine and install more dangerous malware.

Read: How to Spot a Suspicious Email and Stop Phishing

The majority of Phishing attacks are sent en mass to stolen email lists containing large groups of people and companies. Still, the most effective attempts are the ones that go after a specific individual in a company, typically called Spear-Phishing or Whale-Phishing, depending on the position of the target. These targeted attacks usually involve a fair dose of research into the individual’s personal and professional life so that the messaging can be specially crafted for maximum chance of success.

Criminals in the past have gained access to accounts and sat quietly, patiently obtaining as much information as possible before finally striking. Professionals and companies who deal with finance should never underestimate this sophisticated social engineering practice. The best way to stop Phishing in its tracks is to train your users and hire an Email Protection suite.

Once a Phishing attack is successful, the criminal may take control of the user’s computer and spread its roots over the network. This is what we’ll discuss in the next point.

Unauthorised Access in Your Network

A cybercriminal may be able to infiltrate your network in many different ways, and Phishing is just one of them. They may enter through employees’ personal devices that had been infected, via unprotected networks or even USB sticks carrying malware.

After getting in, they’ll have access to the most critical files and data your company possess. Once your data has been stolen, they’ll continue to find ways to profit from your vulnerability. Their tools can quickly spread all over your network, providing them with real-time monitoring and giving them the ability to control your machines remotely.

Detecting their movements will be incredibly difficult if your business does not have access control and monitoring capabilities. Unless they want to be noticed – typically when it’s too late! That’s when cybercriminals lock people from their machines and ask for a ransom to retrieve their data – a crime known as ransomware.

We have a complete guide on ransomware, which you can find here: What is Ransomware and How to Avoid It – The Complete Guide. It is a scary situation if you have no preparations in place. If you do, you need to call your IT partners, shut it all down and run a backup from before the invasion. Ideally, your partner will likely have detected the invaders before they even strike. As usual, the point of this article is not to be scaremongering but emphasising the importance of being ready before cyber crime strikes.

Data Breach

You must have heard at least a few times that “Data is the new gold”, and hackers definitely see it like that. Whenever a criminal has access to your data and files, you’ll find a Data Breach. They steal data in the first place to profit from it by selling it online. The dark web holds a hidden marketplace for criminals, where this type of data is readily available. At times, they may also choose to sell your data straight to your competitors. 

Whichever type of data it is, you don’t want it falling into the wrong hands – particularly when you operate in the Financial Services space. This data may be used for criminals to go after your customers and stakeholders and hurt them in many ways. Using stolen information, criminals can perpetrate Identity Theft and pose as others to obtain financial gains. This is much more common than it seems, and we have a complete guide detailing how it happens and how to avoid it here: The Essential Guide to Avoiding Identity Theft.

On most occasions, companies don’t even realise their data has been stolen, and when they do, it could take months before finding out. If you do detect a data breach, make sure to inform everyone who’s been affected so they can take the appropriate procedures and secure their accounts as soon as possible.

Supply Chain Risks

The last common type of cybercrime against Financial Services companies we’ll mention today relates to supply chain risks. These are becoming increasingly common and will happen when criminals control an account in a supplier’s environment. They will then take advantage of the trust in the relationship between stakeholders to obtain financial gain. They can do that by generating a fake invoice or even requesting to change payment details to a bogus account.

It could affect your business in both ways: when criminals pretend to be coming from your company and trick your suppliers or when they pretend to be your suppliers to trick you. This risk is substantial because it means your personnel can’t lower their guard even when your network is secure. And you have limited influence over your partner’s security posture, so having strict payment policies and procedures in place is vital to avoid this threat.

We have a few articles talking about this risk with more detail, listed below:

How to Effectively Manage Supply Chain Risks
Recommended Best Practices for a Secure Supply Chain
The Top Supply Chain Vulnerability: People

Avoiding Cybercrime

Now that you have a good overview of what cybercrime against financial services companies looks like, you’ll be better prepared to deal with it. There’s a vast number of tools and methods your business can use to improve your security posture. The best way to remain updated and secure is to hire a Managed Services Provider as your technology partner.

That way, you’ll be updated about new threats and ensure that the best tools are at your service. If you’re looking for a specialised firm that will be happy to assist, look no further. Spector has a team of experts with in-depth knowledge about Financial Services and their security and compliance needs. We’ll listen to your concerns and propose a tailored solution to suit your requirements. Book a Call today!

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