The 6 Biggest Financial Sector Cybersecurity Threats in 2022

By Veniamin Semionov, Director of Product Management, NAKIVO

The financial sector cybersecurity is always a concern because this industry branch is among the top targets for cyberattacks. And this is no accident. Intruding into the IT systems of banks or other financial institutions aims for illegal enrichment, espionage, geopolitical challenges, and terrorism. Lone actors and criminal groups initiate attacks to steal money from individual bank accounts. At the same time, rival states and ideological opponents can aim to gain classified data, cause disruptions in financial systems and provoke panic among citizens.

In the post-COVID era, digital transformation processes in industries are accelerating and evolving, opening new possibilities and bringing new dangers. The overwhelming expansion of online solutions means the exponential growth of risk factors and vulnerabilities, both inside and between the IT infrastructures.

Here are the six biggest threats to cybersecurity in the financial sector to be aware of in 2022.

State-Sponsored Attacks

An average user might think that a usual financial sector cyberattack initiator is a solo hacker or a criminal group. But governments can sponsor and coordinate such digital strikes too. The increasing frequency of state-affiliated cyberattacks resulted in the official definition of cyberspace as a warfare domain by NATO in 2016. Attack initiators from abroad can aim to destabilize the financial and social situation in a target country by disrupting and paralyzing financial flows.

Ransomware

The risks for financial industry organizations have increased along with the global rise of ransomware threats. During the first half of 2021, a year-on-year growth of ransomware attacks on financial institutions reached 1,318%. Hackers regularly improve and develop their ransomware strains to stay ahead of protection solutions, so a ransomware breach is a matter of “when”, not “if” for an organization.

As ransomware attacks on financial institutions continue, and complete prevention of ransomware infiltration in the organization’s infrastructure is barely possible, concentrating on data protection is a wise decision. Regular backups are the most reliable way to protect critical data from loss. Contemporary solutions like NAKIVO software enable you to set automatic backup workflows, store backup data in air-gapped locations and apply immutability. Immutable backups are protected from alteration or deletion during the chosen period, and usable for recovery even if ransomware tries to reach your backup repositories during the attack.

Unencrypted Data

Although sensitive data encryption seems obvious for financial organizations, not every bank encrypts data by default. Unencrypted data is a problem for smaller banks that don’t always have enough funds to invest in cybersecurity. Criminals can use unencrypted data right after retrieval, which means more danger for clients and partners of every financial organization falling victim to a data breach.

Third-Party Software Vulnerabilities

An IT infrastructure of an average organization is never isolated. Organizations integrate third-party solutions to support the required level of online presence, speed and productivity of internal and external workflows without overly investing in proprietary software. Still, such a forced reliance on multiple partners in a supply chain increases the instability of IT systems.

Every piece of third-party software integrated into an organization’s environment brings not only functional benefits, but also vulnerabilities that bad actors can exploit. For example, malware can go through unnoticed backdoors, resulting in sensitive data theft, corruption or deletion. The timely third-party vulnerability discovery and neutralization are possible only with the regular assessment and monitoring of the whole IT infrastructure of an organization, including digital supply chains and integrated solutions.

Social Engineering

Social engineering defines a broad range of attacks having interpersonal interactions at their core. For example, a hacker can pretend to be an outsourcer, an IT specialist contacting bank staff members via email and asking them to urgently provide personal account login credentials to help with the prevention of security breaches. The attack scenario and the intruder’s role can change, but the purpose is always the same: to get the confidential data or make an authorized person act in favor of a bad actor.

Phishing attacks on financial institutions are a social engineering instrument. Senders can make their emails look official by pretending to be, for example, a CEO of a target bank. The content of a phishing email aims to trick a recipient, for instance, a bank staff member, and make them click a malicious link or open a virus-infected attachment. After the security of an organization is breached, a hacker can continue the attack inside the IT infrastructure.

Insider Threats

When speaking of cyber threats to banking industry organizations, the most frequent actors to blame are outsider hackers. However, dangers can also originate from the inside. Apart from social engineering outcomes, there are at least two more things for finance cybersecurity specialists to stay aware of: human errors and malicious insiders.

• Human error. Any team member can get tired, careless, or inattentive. An error when doing one’s job is the consequence. A single tap on the wrong web banner as a result of distraction may be the reason for a disaster inside the organization’s IT environment.
• Malicious insiders are more dangerous and less predictable because they aim to open or exploit a security breach purposely. This threat source can be a former employee who thinks they were unfairly fired, or a current employee acting in favor of third-party interests.

Conclusion

In 2022,  the challenges of cybersecurity in the financial sector have evolved together with industry developments. Among other threats, the six most significant are:

• State-sponsored attacks
• Ransomware
• Unencrypted data
• Third-party software vulnerabilities
• Social engineering
• Insider threats

Keep those six points in mind when building a reliable protection system for the IT environment of your financial organization.

About the Author

Veniamin is a Director of Product Management at NAKIVO.  He obtained his Master’s degree in Software Engineering from the National Aviation University, which is located in Kyiv, Ukraine. Veniamin is responsible for driving the implementation of features and functionality for NAKIVO Backup & Replication. Before his position as a director of product management at NAKIVO, Veniamin worked as a QA Engineer at Quest Software. Veniamin has 10 years of experience in product management, working with virtualization and cloud technology.