In the last decade, the financial sector has seen a major rise in cyber threats and data breaches. In fact, the financial services industry made up more than 62% of exposed data in 2019, even though it only accounted for 6.5 percent of all data breaches. Cyber criminals are finding new ways to attack banks and other financial institutions, leaving them with having to take care of financial messes as well as legal battles.
Since financial service companies are more likely to be targeted than companies in other industries, it’s important to understand what kinds of cyber threats the industry faces. This will help to keep data safer while also preventing big financial and reputational losses.
Here are some of the most important threats facing the industry today.
Identity Theft
On an annual basis, the banking sector faces a loss of more than $10 million through identity theft. More than 15 million U.S.-based banking customers have fallen victim to this kind of threat. Identity theft uses the personal and financial information of a customer to take money out of their account(s). When a data breach happens, the data the customers have is either sold or bought in dark web sites by cybercriminals to use in other cybercrimes.
Employee Error
Human error is one of the most underserved cyber threats in the financial sector. When an employee uses their mobile device or company computer to log in to their email, they are opening the door to phishing scams and malware attacks. And with these attacks on the rise, it’s important for banks to be aware of the damage they can cause.
Ransomware, for example, is causing banks to rethink how they go about Internet security and obtaining cyber liabilityinsurance. This kind of threat, in which a cybercriminal uploads a software that is malicious in nature and holds a network hostage until a ransom is paid, can be accessed by an employee who clicks on a link in an email, activating the software into the system.
Banks should review and update their data hygiene practices and employee knowledge of cyber threats. Having education available can help to limit risks and keep employees aware of how to maintain cyber security at work. Banks should also review their current cyber liability insurance to make sure they have the right resources in place to make up for losses following a data breach or other cybercrime.
Synthetic Fraud
Synthetic fraud occurs when a fake identity is made up, such as from a social security number. The attacker creates several fake identities in which they use to seek credit from banks. From there, they use the credit and finances to purchase goods. This fake identity cannot be traced in a system because they simply do not exist.
About Financial Guaranty Insurance Brokers
Since 1983, Financial Guaranty Insurance Brokers has distinguished itself as a provider of Professional Liability, Cyber Liability, and Crime insurance products for entities of all types. To receive timely, personalized service from a knowledgeable and experienced staff, call us today at (877) 485-4413 to speak with one of our professionals.