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The financial sector provides some of the most important services in Australian society. Wealth management, superannuation, brokerages, and investment funds are all heavily linked to the prosperity of the Australian economy.Analysts estimate that the financial services industry generated $13.1 trillion in revenues in 2014. As the Australian economy continues to be one of the more stable of the western countries, the financial sector has turned into a more attractive target for cyber criminals.
One of the main motivations for cyber attackers has always been the financial gain that can be made from stealing money directly from individuals or selling people’s personal data on the dark web. In 2017, 8.5 per cent of all data breaches involved companies within the financial sector.
Many cybercriminals are evasive as they target proprietary trading algorithms and highly sensitive data across the financial sector. Additionally, it’s very possible that hackers may hold CEO’s of various financial services digitally hostage, being blackmailed by hackers to release funds to prevent breaches going public or have their customer’s data sold on the criminal underground to the highest bidder. With government regulations such as GDPR and Notifiable Data Breach scheme in place, a continued emphasis on cybersecurity and data protection must be prioritised across the Australian financial sector.
New Technology, New Risk
Digital disruption has been a major focus for organisations across the financial sector. As new innovative technology becomes available, security practices are forced to play catch-up.
This practice of security struggling to keep up with technology is particularly a serious issue across the financial services sector. Organisations must successfully balance new technology that will provide a positive customer experience, with security practices that will keep Australians safe.
While new technology can be one of the risks for the financial sector, failing to properly integrate new technologies into legacy systems can be just as big of an issue.
Technology is also allowing the financial sector to become more intertwined with other financial services connecting banks, superannuation accounts, investment management firms and governing bodies like the RBA together. It’s not rare for cyber criminals to first breach a weak link – often something like a self-managed superannuation fund – as an entry point to compromising larger financial institutions. Ensuring services remain protected is paramount for the financial industry.
Personal Data is at Stake
Individual’s personal financial information continues to be a key target for threat-actors due to the gold mine of valuable credit card and personally identifiable information (PII) that is available. A cyber-attack that compromises an individual’s data can be costly for financial institutions both in terms of monetary loss and reputation damage. A misstep in the public eye can also cause investment capital to erode due to reputational damage.
The financial sector must also be aware of industry regulations. Not only are financial institutions subject to regulations from authorities such as APRA, ASIC and the RBA, but also data breach requirements like Australia’s mandatory data breach notification scheme and the EU GDPR. Failing to comply with protecting private customer information under these regulations can damage severely damage the reputations of organisations. Clearly, cyber-attacks in the financial services industry should serve as a wakeup call for organisations to enhance their security framework and data privacy methods.
How can financial institutions stay protected?
Staying ahead of cyber attackers requires a significant, yet necessary investment in resources and education. Continuous monitoring of systems is essential for threat prevention and detection. While there are no guarantees, for security solutions to be effective, they must include early warning systems, enabling institutions to detect, prevent, rapidly respond to and predict cyber-attacks on their operations. A proactive response that allows a quick reactive response is much better than identifying an attack days, weeks or months after the damage has already been done.
Many financial organisations augment their skills with managed security services providers. Security service providers are experienced in dealing with all manner of threats and come with the knowledge required to effectively stress-test networks. This allows vulnerabilities to be identified and holes blocked before they can be breached. In the event of a breach, the right security solutions can help drastically mitigate negative effects.
Without adequate cybersecurity, financial institutions are a hunting ground for cyber-attackers. However, financial institutions on top of their cybersecurity needs must remain vigilant by continuously monitoring and being prepared to act. Effective cybersecurity ensures financial institutions fulfil their obligations to protect the personal data of customers and avoid reputation damage.