Data belonging to 20.4 million UK citizens was affected by cyberattacks made against financial institutions at the end of 2023. This represents a 143% increase from the 8.4 million individuals affected in the previous year. The demand for robust cybersecurity is ever-increasing in financial institutions.
Financial Institutions encompass a wide range of businesses dealing with financial and monetary transactions, including banks, insurance companies, and brokerage firms. These institutions are pivotal for a functioning capitalist society, simplifying transactions, enabling individuals and entities to seek investment or lend money, and assisting in managing assets.
The increasingly digitalised nature of the economy, including the rise of online-only financial institutions like challenger banks, has accelerated the development of financial technologies and their adoption in the market. As a result, Software as a Service (SaaS) for finance, such as digital banking, electronic payment, online investment, and other online-based services, makes financial services more accessible to the consumer. But, with the ease of access technologies provided, new challenges have also emerged, especially regarding cybersecurity.
Financial institutions are enticing targets for cybercriminals. Therefore, cybersecurity has become integral to banking security in protecting data from malicious attacks.
Here are seven top cybersecurity solutions to secure data from online threats.
1. AI-Powered Threat Detection
The ability for AI models to perform pattern recognition on large amounts of unstructured data is opening up an exciting new frontier in threat detection for cybersecurity teams. AI tools can potentially flag subtle differences, anomalies, and patterns that could point to a zero-day threat or the presence of a bad actor in the system.
Some industry experts believe that AI-powered threat detection will be pivotal in helping cybersecurity teams respond to rapidly evolving cyberattack strategies that are increasingly difficult to combat — somewhat ironically, this uptick in the frequency and sophistication of attacks is at least partially due to the availability of AI tools, which hackers are also putting to use.
AI’s adaptive learning and advanced recognition capabilities enable automated responses to threats and can predict future risks by analysing past patterns. This helps reduce false positives and saves security teams time on assessments.
2. Multi-Factor Authentication
Multi-factor authentication has quickly become the standard in security and identity protection as more and more people bank, shop, and administer their lives entirely online. Put simple, it’s a multistep account login in which more information besides username and password must be provided.
Typically referred to as “something you have, something you know”, multi-factor login procedures drastically reduce account hacking, allowing security teams to detect suspicious activity that occurs in the logging processes.
3. DDoS Mitigation
Distributed Denial of Service (DDoS) is a coordinated cyberattack that overwhelmingly sends a request to the server simultaneously, which makes the server slow down or even go offline. DDoS mitigation is important for banking service security to prevent the interruption of vital services.
Cynersecurity teams can perform DDoS mitigation by implementing a load balancer, restricting requests from certain places, and blocking communication from outdated or unused ports, protocols, and applications.
4. Compliance
Compliance is vital to both ensure the security of systems and organisations against cyber attack, but also to prevent legal penalties and repercussions if an organisation is found to be in breach of existing regulations. These regulations ensure that an organisation’s cybersecurity set up is in line with the security and data protection laws in the countries where it operates, with the end goal of mitigating risk to the consumer — or just people in general whose data is collected and kept by the company.
There can be serious legal and financial risks associated with non-compliance — tied to both finance and cybersecurity. For example, in 2021, Natwest was fined over £264 million by the FCA for its extended failure to identify and prevent money laundering. Since the FCA was established, there has not been a year when its total fines issued have been less than £1 million. In the UK, other financial and cybersecurity compliance regulations are DPA 2018, UK GDPR, NIS regulations, and the Computer Misuse Act 1990.
5. Database Activity Monitoring
Database Activity Monitoring refers to any set of tools that monitors and analyses database activity. The goal of this monitoring is to flag and report deceptive, illegal, or undesired behaviour taking place within a system. Ideally, these tools run and operate without any serious impact on user experience.
Because most databases don’t monitor or flag suspicious activity by default, unless you have a tool that handles activity monitoring, making third party solutions a necessity in many cases. According to monitoring software solutions vendor Cyral, most systems also don’t collect enough data to enable “a full forensic investigation of historical breach events.” Also, databases that do often log and store this information inside the database itself. Any attacker that gains access to the database can then, supposedly, have write access to the full collection of tables (as is often the case), meaning they can easily delete any activity rows associated with their presence and theft of data.
6. SQL Injection Prevention
SQL injection is a code injection technique attackers use to steal, spoof, and manipulate data. An effective SQL injection attack can result in attackers gaining unapproved access to sensitive data like including credit card information, PINs, or other private information. In banking security, a failure to prevent SQL injection can result in attackers altering balances, voiding transactions, and even transferring money to their bank accounts.
Cyberattackers inject malicious SQL code into the backend of a target system when they discover defenceless user inputs in a web application or web page. The hackers can then use this opening to locate the IDs of other users within the database, impersonating these users — usually those with data privileges such as the database administrator — to run malicious code within the system.
7. Regular Risk Assessment and Training
Perhaps most importantly, the best defence against the rising tide of cybercrime is a cybersecurity conscious culture. Financial institutions should conduct regular risk assessments manually to identify potential vulnerabilities and threats to their systems and networks.
They should regularly evaluate and revise systems and networks based on analytics and assessments to prioritise cybersecurity initiatives and protect vital assets. Security teams shouls also conduct periodic security awareness training, which can strengthen cyber-readiness among finance personnel. This is particularly important given the rise in generated AI-driven phishing campaigns and other technologically democratised forms of cyber crime.
Case Study – Cybercriminals in UK Businesses
An investment article from IFA magazine reported 300,000 cybersecurity breaches in finance institutions across the UK in 2022 alone, making them the second-highest number of data breaches from all industries after the IT sector. Reports estimate losses in the region of £27 billion per year, with small businesses in the UK affected the most by cyberattacks, usually phishing.
The UK authority encourages its citizens to be more aware of the possibility of cyberattacks, especially phishing and fake charity emails, as online threats are growing exponentially. Ledi Sallilari from the SEO consulting firm Reboot also suggested that more complex passwords can help prevent account breaches.
The rapid expansion of internet usage brings new challenges for cybersecurity. Proper knowledge and awareness about cyber criminals should become mandatory for all Internet users to protect their online data.
Financial institutions, responsible for managing customer funds, need to implement strong cybersecurity measures. With more secure backend systems, they can protect assets and maintain customer trust in an increasingly digital world.
- Cybersecurity in FinTech
