Did you know that cybercriminals choose their victims based on two factors? Those are maximum impact and maximum profit.
Financial institutions are just the right kind of target for cybercriminals: they store a lot of highly valuable data, and their digital transformation is creating more opportunities for cyber attackers to breach financial data. Due to this financial sector is mostly targeted by cybercriminals behind the healthcare sector. Data breach statistics shows that cybercriminals know how sensitive online banking system is in the 21st century.
In 2021, 3.3 million Indians had their bank information exposed on the dark web. This information included people’s bank account details and KYC certificates. A vulnerability in the database of the cryptocurrency exchange operator buying coins led to the alleged data leak.
That’s why it’s important to understand the causes of a data breach, so you can protect yourself and your business from becoming a victim to it.
Top 5 ways Data Leaks-
1. Unintentional data leak due to human error.
According to a study by IBM 95% of cyber security breaches are primarily caused by human errors. Often, humans are the weakest link in an institution’s cyber security, making them vulnerable to cyber-attacks. A silly mistake by even a single employee or the unintentional neglect of the cyber security policies enforced by the management can lead to devastating cyber attacks. So some of the unintentional human errors which need to be taken into consideration to avoid financial data leaks are.
- Password problems- Humans and passwords simply don’t get along. The facts from The National Centre for cyber security report cast an image: 123456 remains the most popular password in the world, and 45% of them reuse the password of their main email account on other services. In addition to that, mistakes like not making a strong unique password can lead to Financial Data breaches.
- Physical errors- While data breaches are most often attributed to cyberattacks, businesses are also liable to physical threats. Confidential information and credentials can be stolen or viewed by an unauthorized person if the person gains access to secure premises.
2. Intentional data leak due to human error.
- Departing Employees- According to the research, it has been found that 87 percent of the employees take corporate information with them after they leave the organization. Nowadays, Business data is mostly stored in an electronic device, which in nature are portable, easy to copy, and more prone to theft than paper.
- Security evaders- Most financial institutions have security policies and controls to protect the company, its data, and its employees, but these controls are often viewed as inconvenient to employee productivity. So employees breach the security control by saving the company data to the personal cloud drive. It can destroy an organization’s control over its data and can be manipulated.
- Inside agent- Third-party employees are the one who works on the behalf of external groups and has easy access to the organizational data. Those agents can transfer the confidential data to their files, by which they get full control towards the financial institute data which can be misused in any form.
3. Cyber Attacks
It is very surprising to see that most financial institution does not take financial security threat as seriously as they should. Businesses aren’t adapting to change in the regulation and evolving IT landscape, which leads to an increase in the risk of a data breach.
Here are how cyber-attackers can enter the business network
- Malware- End-user devices such as cell phones and computers that have been compromised by malware pose a risk to financial institute cyber security. Sensitive data passes through this connection and if the end-user device has malware installed on it without proper security, that malware can attack the cyber security and breaches the financial institute data.
- Patching- Cyber attackers are on constant watch for new exploits in software. When exploits are discovered software developers race to fix the vulnerability and send out the patch to all their users. That’s why users must install security updates on their computers as soon as they are available. Unfortunately, most often than not the end-users delay installation of the update which can lead to a cyber attack.
- Unencrypted data- This is a very basic yet, very crucial part of cyber security. All of the datastore within your financial institution should be encrypted. Even if the data is stolen, then the hacker cannot use the data on an immediate basis, if it’s encrypted. So unencrypted data can be used by hackers right away and breaches the data security in Financial service institutions.
- Third-Party Services – Many financial institutes use third-party services for providing better service to their customers. If those third-party vendor does not have good cyber security, then they can breach your financial data security.
4. Application Vulnerabilities
From E-mails to financial records, most of the applications we use today are hosted on the web. These applications are vulnerable to attack because they are easily accessible and rely on user input.
Cyber security threats to financial services are rising, including a recent threat to a financial institute that begins seeing suspicious DNS requests while processing financial transactions through web applications. This led to the discovery of show pad, one of the largest supply chain attacks that originated in legitimate software.
Financial service institutions have traditionally considered Data security as a compliance cost. In addition to that, reputation damages due to data breaches that expose confidential customer information can cost the firm significantly. It is therefore very important for financial service firms to have comprehensive data privacy program policies, access controls, and DLP ( Data Leakage Prevention) technologies that enable them to continuously protect themselves against emerging threats. So due to this, the cost implications of a data breach from both monetary and reputation perspectives are increasing exponentially for financial service institutions. So according to the risk management team, every financial institute should work closely in shaping policies related to data security, along with IT groups, to prevent data breaches.