Finance is an industry fraught with peril. Almost one fifth of all cyberattacks target this field, triggered by anything from malware to accidental data leaks – and in response, firms are being walled in by tightening regulations aimed at stopping these breaches. With these factors at play, data protection best practices are more crucial than ever. A basic antivirus program is no longer enough to address financial firms’ increasingly complex needs.
So how can firms protect critical data and effectively mitigate risk?
The Risks Involved in Handling Financial Data
Financial institutions handle some of the most vulnerable information available – namely, transactional and personal data, which threat actors can sell at a high price or use for further attacks. This is the reason financial services are so often targeted. If information is successfully stolen, the consequences for organizations can include:
- Financial: The immediate costs of recovery, as well as reduced profitability in the long term.
- Operational: Limited or halted operations during the attack itself, and potentially data loss (for example, as a result of ransomware attacks).
- Legal: Firms found to be non-compliant with data protection laws may face fines or other penalties.
- Social: If sensitive data has been lost or mishandled, clients will quickly lose trust, leading to long-term reputational damage.
The high stakes involved make cybersecurity in financial services an absolute necessity.
Cybersecurity in Financial Services: Data Protection Best Practices
To prevent data breaches and manage risk effectively, financial services firms must adopt a layered approach that addresses potential threats early. Some data protection best practices that can help strengthen overall security posture include:
1. Encryption
Encryption translates data into an unreadable format, leaving it inaccessible to anyone without the correct decryption key. This is a non-negotiable step for any organization handling sensitive information. Data should be protected using the Advanced Encryption Standard (AES) at all times.
2. Access Control and User Authentication
These measures help prevent unauthorized access to sensitive data:
- Multi-Factor Authentication (MFA): Verifies user identity through more than one means, reducing the risk associated with stolen login credentials.
- Role-Based Access Control (RBAC): A philosophy that limits access to data based on employees’ job responsibilities.
- Zero Trust Architecture: Demands verification for every access attempt, regardless of the point of origin.
3. Data Backup and Recovery Plans
Data is the most valuable asset financial services firms have, and should be treated as such. Backup all critical information as regularly as possible (once per day at minimum), using the 3-2-1 rule: three copies on two different mediums, at least one of which should be offsite. Organizations must also test their backups regularly, and implement a strong recovery plan.
4. Security Behavior and Culture Programs (SBCPs)
SBCPs are the modern evolution of cyber awareness training. Instead of relying solely on education, this strategy focuses on building a security-first culture that actively encourages employees to proactively defend the company. This significantly reduces the risk of data breaches caused by human error and social engineering attacks.
5. Automated Monitoring
AI-powered tools are now able to detect and mitigate potential threats on behalf of human staff, enabling continuous monitoring that would otherwise be cost-prohibitive. Advanced solutions such as this should be implemented whenever possible.
Learn how to keep employees cyber aware between training programs
How MSPs Address Financial Services Cybersecurity
A managed service provider (MSP) is a third-party company that takes care of IT tasks for the firm. These experts have specialized knowledge and access to resources that smaller companies often lack, making a higher level of protection possible. MSPs can improve data security in financial services through various means:
- Security Solutions: MSPs provide advanced security measures tailored to the unique needs of each industry. This may involve endpoint protection, 24/7 monitoring, staff training, or technological solutions.
- Incident Response: In the event of an attack or breach, MSPs are well-equipped to respond quickly and effectively. They can help organizations restore data, isolate threats, and analyze how the breach occurred.
- Compliance Support: As experts in their field, MSPs are familiar with the cybersecurity regulations businesses must face. They ensure that all solutions and practices align with these standards, reducing the risk of penalties.
- Risk Management: MSPs may perform tasks such as penetration testing to help firms discover vulnerabilities, then develop solutions to better protect sensitive information.
Your Data is Under Attack - Protect It With Advanced Strategies
In financial services, cybersecurity will always be a top concern. Threats are evolving at a breakneck speed, and regulations are adapting to match – but with a proactive strategy that combines data protection best practices with the right expertise, firms stand a better chance of avoiding both breaches and penalties. Ultimately, a commitment to stronger security not only protects individuals, but the organization as a whole.
Ready to secure your data? The experts at ION247 stay up-to-date with the latest attack trends, giving you the knowledge you need to respond swiftly and effectively. Discover some of 2024’s worst cyberattacks, and how you can avoid them in 2025.
