Cybersecurity Measures Every Financial Business Should Take

In the modern digital world, financial institutions are exposed to an unmatched wave of cyber attacks. Financial organisations are now on the front line against cyber attacks with hackers, fraudsters and state sponsored actors continuously developing their methods. Whether it is a phishing attack or ransomware, a cyber incident may be catastrophic in terms of money, reputation, and business.

This is the reason why cybersecurity is not an IT issue any longer, it is a business-level priority. Any financial business be it a big bank, fintech start-up, credit union needs to develop a robust security posture that incorporates technology, people, and processes.

The Evolving Threat Landscape of Financial Institutions 

Financial companies have sensitive information and their operations involve billions of transactions daily. They operate personal and company accounts making them the best target of cyber criminals. The high rate of financial services digitisation such as online banking, online payment gateway, and cloud-computing systems has created new attack points. 

Over the last few years, there has been an influx of cyber attacks against financial service providers and banks. Such cases as ransomware attacks, fraudulent wire transfer, and unauthorised access to customer information have become more frequent. There is hardly a difference between computer crime and financial crime nowadays because computer technologies are turned into the new arms of money washers and fraudsters.

Cybersecurity is now an area of focus by regulators in the world including the Financial Action Task Force (FATF). The reason is that cybersecurity violations can be easily used in other activities such as money laundering, financing terrorist, or insider trading.

Cybersecurity and why it is a necessity to achieve financial integrity

Customers are of great importance to the success of any given financial business. A single breach, leak or cyber incident can ruin years of reputation and credibility. In addition to the reputational harm, cyber attacks may result in severe fines by the regulatory bodies as a result of failure to comply with the laws of data protection and anti-money laundering (AML) regulations.

Moreover, the recovery cost of a data breach can be off the scale. Apart from the direct losses, there can be regulatory fines, loss of time in operation, and the cost of restoring security infrastructure. This is to say that cybersecurity is not only a compliance measure but also a business resilience strategic investment.

Cybersecurity Best Practices that all Financial Businesses Must Adopt

A layered cybersecurity strategy that a financial business uses to reduce risks and improve defence mechanisms should include preventive, detective, and responsive controls. 

The following are some of the most critical actions that constitute the basis of an effective cybersecurity system:

1. Introducing a Cyber Security Incident Response Plan

All financial companies should possess a distinct Cyber Security Incident Response plan. A well-structured Cyber Security Incident Response Plan ensures that an organisation is equipped to identify, contain, and mitigate cyber threats before they escalate into serious incidents.

An effective response plan will outline processes for threat detection, communication with stakeholders, incident containment, evidence preservation, and thorough post-incident analysis. To ensure true resilience in the face of a cyber crisis, it is essential to test the plan regularly and keep it continuously updated.

2. Carry out Periodic Cyber Drills and Tabletop Exercises

Preparedness includes training and practice as a necessary activity. Similar to employees conducting fire drills, financial institutions need to conduct Cyber Drills and Cyber Tabletop Exercises as a way of drilling the response to various situations like ransomware attacks, data breaches, or even fraud.

These exercises are based on real world events and teams get the opportunity to identify the weak areas in communication, decision making, and technical response. In addition, tabletop drills involve leadership teams, compliance officers, and IT staff to work together to build the defence strategy of an organisation. 

Simulation drills on a regular basis contribute to the creation of a proactive cybersecurity culture as well, in the sense that staff members know their roles and duties in the event of a cyber crisis.

3. Enhance Authorisation and Access Control

Many financial breaches occur are as a result of compromised credentials. Financial businesses should also apply multi-factor authentication (MFA) to all sensitive systems to avoid unauthorised access. Access control should also be implemented where employees have the access to the information as per the role. 

Authentication passwords, privileged access control and identity administration tools will also increase the security level, making internal abuse or theft of credentials less probable.

4. Encrypt Data and Backup on a regular basis

Financial institutions survive on data. The in-rest and in-transit encryption is essential to protect sensitive financial data. Although hackers may gain access to the data, the information will be encrypted and will never be read. 

Regular data backups which preferably should be stored in offsite or cloud-based systems are important too. Backups are also effective against cyber attacks as well as other potential loss of data due to its accidental loss or malfunction of equipment.

5. Awareness and Ongoing Training of the employees

Employees tend to be the weakest factor in the cybersecurity chain. Phishing emails, viral attachments and social engineering attacks exploit human vulnerability. Hence, frequent employee training programmes in cybersecurity are very essential.

These programmes ought to educate employees in identifying suspicious activity, not sharing sensitive information, and security best practices. Constant awareness activities will enable employees to be active protectors and not unintentional facilitators of cyber threats.