Mitigating Cyber Risk in the Financial Sector

Mitigating Cyber Risk in the Financial Sector

From major banking corporations to small town credit unions, the financial industry continues to find itself a prime target for sophisticated cyberattacks and frequent data breaches. Due to the wealth of valuable information financial institutions possess, cybercriminals are always in the mood to invest the needed time to hack vulnerable systems in both large and small financial institutions.

Unfortunately, the repercussions of a cyberattack can be severe, causing reputational damage that goes far beyond any tangible losses, as the mere mention of a breach can swiftly bruise customer trust that took so long to build. Yet, while the financial industry has evolved into an era of high digital dependence, many institutions still depend upon legacy systems to run day-to-day operations, leaving them highly vulnerable if crucial patches and updates are not made quickly

This results in an increased risk for malware attacks, phishing scams, fraud and of course ransomware attacks and data breaches. Such reliance on a digitized infrastructure also makes banks vulnerable to operational disruptions like system failures, service outages and transaction delays – all of which are considered unacceptable from a customer perspective.

Maintain Compliance Through Risk Mitigation

Due to the high cyber risk involved in the financial sector, commercial banks, insurance companies, investment firms and everything in between are required to comply with a number of data privacy and financial reporting laws that are specifically designed to prevent these types of incidents. From SOX to GDPR and PCI compliance, proper management of compliance has long been imperative to the success of any bank. Unfortunately, many of the security requirements found in a compliance framework do not actually help institutions gain a full understanding of where their security gaps may be, what the true scope of their attack surface is, or even what specific type of threats they may face in the future.

Additionally, the stated or implied best practices of compliance frameworks do not accurately reflect the accelerating pace of a rapidly evolving cybersecurity landscape, where, through innovation like AI and Large Language Models, the pace with which new vulnerabilities are discovered and actually exploited in the wild is severely misaligned with expected mitigation timelines.

Prioritizing risk over compliance will actually allow organizations to satisfy many compliance requirements while better securing the security ecosystem as a whole. As a result, having a robust cybersecurity strategy in place to recognize, react and mitigate such security risks and effectively safeguard private data is crucial to the success of the organization.

Establish A Secure Assessment of Risk

According to a recent report released by Google’s Threat Analysis Group (TAG), the number of hackers-for-hire is set to grow immensely over the next few years. With this growth comes a crucial need for banks’ IT leaders and security professionals to implement proper risk management in order to protect not only their own assets but that of their clients.

Data security remains a complex environment with many moving parts that require continuous and consistent effort. Understanding what’s at risk is a key first step for CISOs. One cannot protect themselves from things they don’t know exist. Proper risk management starts with executive leaders taking a comprehensive assessment of known security risks within their organization’s environment. Next, regular scans should be conducted in order to swiftly identify vulnerabilities and provide mitigation tactics while ensuring stored data is consistently backed up and encrypted.

Security monitoring of this caliber involves the examination of multiple logs or network devices, such as servers, firewalls, and switches, to detect possible security incidents. Ensuring a collaborative and prepared incident response plan is in place will allow both IT teams and employees alike to map out and practice response steps before being placed under pressure. Disaster plans like these are essential to a reliable and efficient cybersecurity program, but large enterprises often find that solely relying on manually operated and human-driven security efforts can negatively impact the security of the business.

Streamline Securities Strategy with Automated Tools

This is where automating the crucial step of patch management can transform a cyber resilience strategy for the financial industry. Currently, the go-to process of loading updated versions of software to apply vulnerability patches and bug fixes is still a very traditional approach. With manual patching in place, banking systems must schedule maintenance downtime while servers reboot and get serviced, often interrupting business operations and locking customers out of their apps or online access to their funds. Traditional mitigations to this disruption involve over-spending in capacity and high availability, which unnecessarily increases upfront costs for an IT solution in-house, or increases spending on cloud capacity, as appropriate. Relying upon High Availability in this manner, to cover for operational and predictable downtime, is not its intended original goal of disaster resilience, but is, unfortunately and expensively, abused this way.

Unfortunately, because of the tedious and labor intensive process that patching is, security teams often will, ironically, choose to delay such downtime by weeks or even months to avoid interruptions that may be considered too frequent. Yet, this approach to security completely goes against natural reactions to risk. If one was going to bed on a Tuesday night and noticed their back door wide open, why would they wait until Friday or later to close it? This delay in applying patches means hackers are virtually handed the opportunity to exploit known vulnerabilities.

This mentality of delaying vulnerability patches due to inconvenience places the entire enterprise at a severe risk for a damaging attack. But by choosing to apply automation to the patching process, security teams can confidently limit the high-risk window that appears when a critical vulnerability is found while lowering the organization’s chances of falling victim to an exploited and unpatched vulnerability that can result in a ransomware attack, data breach or both.

Additionally, by employing a live patch management system, labor cost savings can be substantial, as scheduled downtime and lengthy maintenance windows will no longer be needed. Moreover, initial spending and operating costs and complexity can be lowered by reducing the dependency on complex high availability scenarios intended to just cover these potential disruption events. Instead, IT teams can shift more of their focus to tasks that are more strategic to the business itself.

A quick response to a detected threat is key to mitigating damage. Because the financial industry requires 24-hour access for its customers, having their assets compromised by a ransomware attack could be catastrophic for daily operations. Having an incident response plan in place not only allows the organization to prepare its response steps before being placed under unexpected pressure, but it also allows IT teams to implement automated recovery plans that ensure a consistent patching routine.

Joao Correia serves as Technical Evangelist at TuxCare (www.tuxcare.com), a global innovator in enterprise-grade cybersecurity for Linux.