Cyber Threats in The BFSI Industry
Cybersecurity in the BFSI industry is one of the critical areas of concern today. The banking and financial services industry is highly regulated on the cybersecurity front. Why is it so? The total cost of data breaches in the financial sector in 2021 was USD 5.72 million on average, second only to the healthcare industry. The growing sophistication, severity, and lethality of cybersecurity threats to the financial sector further accentuate the industry’s challenges.
This article delves into the importance of cybersecurity in the BFSI industry and the top threats facing the industry.
Cybersecurity in the BFSI Industry: Why is it so Important?
Cybersecurity in the financial sector is important because of the nature and volumes of data that the banks and financial institutions hold. Suppose attackers gain access to financial sector data, they can easily auction off stolen data to the highest bidders and use the credentials to steal millions of dollars from customer accounts.
The high cost of data breaches is another major reason why cybersecurity in the banking industry is critical. One of the key contributing factors to this high cost is the average time to identify and contain data breaches. This was found to be 233 days – that’s around 8 months! The attackers have sufficient time to steal data or siphon money from user accounts.
The third reason why cybersecurity in the banking sector is critical is that every financial service employee has access to nearly 11 million files on average and 20 million files on average in larger organizations. They also have access to 1000+ sensitive files. So, cybercriminals can wreak havoc by simply targeting a few financial services employees. The BFSI industry ranks first in terms of exposure to sensitive data, with 21% (resulting in 352,771 records)!
5 Major Cyberthreats Facing the BFSI Industry
One of the major threats to cybersecurity in the banking industry is phishing. By capitalizing on human weaknesses, cybercriminals trick unsuspecting business users and customers into sharing their login credentials. The availability of phishing kits has made it much simpler and inexpensive for cybercriminals to launch phishing campaigns.
Phishing attacks in Q4 2021 targeted the financial services sector the most. 23% of all phishing attacks were aimed at the industry. In addition to email phishing, variants such as smishing, vishing, and spear-phishing grew popular.
Ransomware is another critical cyber threat to the financial sector today. In this attack, cybercriminals inject malware into the organization’s systems to freeze them and demand a ransom to access the frozen systems and devices. In the interim, the attacker could steal data or alter it, steal money, destroy business-critical files, etc. Given how the banking industry cannot afford downtimes, cybercriminals use ransomware with the goal of massive financial payoffs.
In H1 2021, the banking industry saw a disproportionate year-on-year increase in ransomware attacks to the tune of 1318%. One of the main reasons for this upsurge of attacks is that companies are paying ransoms, encouraging cybercriminals to keep striking more lucrative targets.
3. DDoS Attacks
Banks and financial institutions cannot afford downtimes and crashes. And that is exactly why cybercriminals target the industry with DDoS attacks, making networks, websites, and applications unavailable to legitimate users. In 2021, 50% of targeted organizations were in the banking and financial services industry. There has also been a growth in sophisticated and multi-vector DDoS attacks.
The rising trend of digital transformation has widened the attack surface of the banking industry as the attack surface includes not just the bank’s IT systems but the wider payment ecosystem and the multitudes of customer accounts. This offers several more entry points to attackers.
In recent times, a growing threat to cybersecurity in the financial services and banking industry has been spoofing attacks. Attackers develop fake websites that look very similar to the genuine website of the financial service provider. The attacker redirects users to the fake website and asks for user credentials in combination with phishing. Since the website is seemingly genuine, the users don’t suspect foul play and enter their credentials for the attacker to exploit.
5. Insecure Third-Party Services
From chatbots to customer relationship management software to digital services, banks rely on third-party services to offer complete online banking experiences to customers. Even if the bank has unbreakable security mechanisms, the level of security of these third-party services directly impacts the bank’s security. Banks need to ensure that their service partners are compliant and severe about security to avert major security crises.
With robust, multi-layered, and futuristic security providers like Indusface, the threats to cybersecurity in the BFSI industry can be effectively mitigated and the security posture can be hardened.