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Unveiling the 9 Critical Data Security Risks Threatening Financial Institutions

data security risks in financial institutions
Image source: IT Support Partners | 9 Data Security Risks in Financial Institutions

Data security and maintaining customer confidentiality have become top priorities in many industries, particularly finance, in the face of ever-evolving cyber threats. The substantial amount of private and financial data that these institutions possess is the reason for this.

Both the scope and complexity of these attacks have increased dramatically. Furthermore, financial institutions experienced an average of 700 assault attempts every week, ranging from denial of service (DDoS) attacks to phishing schemes, according to Check Point statistics from 2022.

In light of this, we have divided up the threats and forms of assaults that financial institutions are susceptible to. Understanding them is critical for implementing successful data security methods.

9 Data Security Risks in Financial Institutions

1. Application vulnerabilities

Some application security mechanisms, if obsolete, can expose security flaws. For instance, static security has shown to be insufficient when it comes to the growing complexity of threats. There are several possible failures in the current situation at different stages of the Software Development Life Cycle (SDLC), which can lead to far more severe outcomes.

The consequences of not hardening application security against these threats can be prohibitively expensive, as seen by occurrences such as Log4shell and other serious vulnerabilities, along with the increasing number of malicious packages identified in the popular Linux PyPi open-source repository.

2. Phishing

This well-known social engineering approach asks for personal information—such as login credentials and credit card details—in the form of phony emails and texts that seem authentic. The goal is to fool people into revealing their private information. This kind of crime has proliferated due to remote labor, which has been made worse by the COVID-19 pandemic.

3. Malware and Ransomware

Malware is the term for variations of malicious software, including Trojan Horses, Worms, and Spyware, that infect devices, steal data, block access, and harm systems in order to gain unauthorized access to or harm computers. Antivirus programs that scan malicious file attachments are among the detection tools that these attacks are becoming more and more adept at evading.

Ransomware attacks have the potential to permanently destroy sensitive and important data, hinder a bank's operations, and involve hackers blocking access to a victim's systems or data and demanding a ransom to unlock them. Ransomware groups have increased the scope of their operations in recent years to encompass data breaches and theft. This may lead to regulatory fines for the bank and the exposure of private financial information of its clients on the dark web.

4. Denial of Service Attacks (DDoS)

Cybercriminals utilize enormous traffic overloads on financial institutions' computers and networks to disrupt operations and prevent genuine users from accessing services.

5. Internal data leaks

Institutions themselves can pose a threat if careless or malevolent staff members get access to, duplicate, or leak private information. Strong security protocols and employee education are necessary to reduce this danger.

6. Data leaks due to the use of Generative AI

Utilizing generative AI software raises the possibility of unintentional data leaks from the organization. This is due to the fact that these programs have the ability to keep user-provided data and utilize it to train new models, severely jeopardizing privacy. Even while account activity recording can be turned off, providers continue to store and process data for a while, which raises serious concerns, particularly in highly regulated sectors like finance. Employees must be made aware of the risks connected to this strategy.

7. Advanced Persistent Threats (APT)

This kind of hazard arises when an intrusive party enters a system and stays hidden for an extended length of time. As a result, it spies on commercial activities and takes personal information while dodging defense mechanisms.

8. Code injection attacks

These attacks expertly exploit weaknesses in systems and apps to insert malicious code that is intended to cause harm. Criminals can access private information, carry out unlawful orders, and jeopardize system integrity in this situation.

9. Man-in-the-middle attacks

In this case, the cybercriminal uses this technique to steal data by secretly intercepting and retransmitting messages between two parties. In order to read, alter, or even introduce malicious information into the connection, the attacker secretly enters the data flow. This allows them to carry out a variety of frauds, including password interceptions, identity theft, and transaction manipulation.

A classic depiction of this may be found in unprotected wireless networks, where an intruder can obtain information from the network as well as the user's device, emphasizing the possible weakness in unsecured settings.

Looking for a partner with a complete portfolio to protect your company?

Contivos is a firm that develops and manages solutions for networks, information security, and integrated risk management. We work with highly qualified experts to battle cyber threats and support your business in addressing digital security concerns.

Contact with one of our specialists to determine the best course of action for safeguarding your company.

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