5 Biggest Cyber Threats for Financial Services

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5 Cyber Risks for Financial Services Firms

Cyber Risks for Financial Services Firms

According to a VMware report, cyber attacks increased by a whopping 238% from February to April 2020. This number is only expected to rise as financial firms move operations online.

This is why cyber insurance is necessary. It protects you against all risks involved with malicious attacks.

Below, we'll look at five cyber risks that you need to watch out for. We’ll also cover some financial services cybersecurity statistics and tips you can use to protect your business.

1. Phishing

The most common method that hackers use to access client information is phishing. This occurs when a hacker sends you an email pretending to be a large company and gets you to enter sensitive information. 

Criminals may even attach malware to emails; when you open it, it harvests login credentials.

Because phishing emails are becoming harder to recognize, it's a popular technique used by hackers. Reports show that 90% of all successful cyberattacks within the financial industry start with phishing. 

This can have devastating consequences, especially if these individuals access client and employee information.

Fortunately, if you have E&O insurance, you won't have to worry about phishing emails since your carrier will cover client losses.

2. Ransomware

Ransomware attacks increased by 520% between March and June 2020, making them a significant threat to financial firms. Hackers will capture client information or lock users out of the system until a ransom is paid, typically in Bitcoin.

But experts advise against paying ransoms because there's no guarantee the attackers will keep their word. They might even save a copy of your files and target you again in the future.

With cyber security insurance, you're protected against ransomware and extortion. Cyber insurance carriers employ teams of professionals who will retrieve your information and prevent hackers from entering your system again.

3. Malware

Although ransomware is most common, other types of software can also harm your computer systems:

  • Adware displays pop-up ads and downloads them while draining your computer’s resources in the process. 
  • Spyware monitors your internet activity and gathers input information like usernames and passwords.
  • Viruses multiply and attach themselves to files to steal information.

This is why it's essential to understand the dangers of all malicious software. Implement anti-malware applications and regular system checks to prevent hackers from infecting your system.

4. DDoS Attacks

Also known as distributed denial-of-service attacks, DDoS is when your server is flooded with thousands of fake connection requests, forcing it to go offline. 

These attacks are becoming increasingly popular against companies providing financial services since they can affect various aspects of the business—from customer accounts to payment portals and infrastructure.

Hackers will use DDoS attacks to blackmail companies or distract them from a more dangerous system breach.

5. Bank drops

Bank drops are another cybersecurity risk for financial institutions.

These occur when cybercriminals open bank accounts with stolen client credentials. Criminals collect someone else's information so they can conduct illegal transactions without it being traced back to them.

You can prevent bank drops by using two-factor authentication and manually reviewing personal documents.

Read More: Cybercrime Statistics

How to protect your business against cyber risks

Cyberattacks on financial institutions in 2022 are increasing. So here are a few ways you can protect yourself:

  • Back up all data
  • Implement strong patch management
  • Invest in cyber and E&O insurance 

Back up all data

Backing up data on an external hard drive or cloud software lessens the impact of data breaches. You can restore data earlier, helping you recover from attacks.

Implement strong patch management

The next step is to implement strong patch management. Patch management uncovers weaknesses within your firewall and provides a step-by-step procedure you can use to improve cyber security. 

By staying up to date on the latest firewalls and constantly patching up bugs, you give yourself the best possible chance of avoiding cyber risks.

Invest in cyber and E&O insurance

Even though you’re backing up data and improving your security regularly, you can't eliminate cyber risks. This is where cyber and E&O insurance can help. Depending on your policy, you're protected against data breaches, blackmail, errors and omissions, and other potential threats.

Worth Insurance helps safeguard your business

As more businesses rely on the internet to operate, cybercriminals are using this to access sensitive information and make a profit. 

So it's important to protect yourself against phishing, ransomware, and DDoS attacks, especially if you're collecting client information and providing financial services.

You can do this by backing up all data, implementing patch management, creating strong passwords, and buying E&O or cyber insurance.

Cyber insurance carriers will take care of breaches and phishing attempts, so you can focus on providing clients with the best financial services. If you're looking to safeguard your business, request a free Worth Insurance quote.

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