It’s no secret that cyberattacks targeting personal data are on the rise. In the first half of 2024 alone, more than 9,000 data breaches—which may have resulted in over 35 billion potentially compromised records—have been publicly disclosed worldwide. These statistics are particularly concerning for financial organizations, as they account for half of all cyberattacks according to Blackberry’s 2024 Global Threat Intelligence Report.

Let’s examine what makes the financial industry such a large target for cyberattacks, including common attacks made against them, a few of the major consequences organizations may face after an attack, and how improving data security can actually enhance financial operations.

Common Cyberattacks Against Financial Institutions

Seventy-eight percent of consumers say compromised financial data is their top concern in a data breach, and a 2024 survey conducted by Bank of England found that 70 percent of banking executives cited cyberattacks as the second-biggest risk to the financial system (second only to geopolitical risk).

Compromised financial data can be devastating to both the consumer and the company and may be orchestrated using the following:

• Social engineering attacks, such as phishing or business email compromise (BEC), where seemingly legitimate correspondence allows attackers access to sensitive information. The FBI reports that this has cost victims over $50 billion in just over 10 years.
• Malware or Ransomware that can be used to hold systems hostage using encryption and only release them once a ransom is paid. The number of ransomware attacks against financial organizations has climbed from 34 percent in 2021 to 64 percent in 2023.
• Human error, which is most commonly the result of consumers or employees failing to follow best practices, accounts for 95 percent of all financial cyberattacks, according to IBM.

Costly Consequences of a Financial Cyberattack

While the global average cost of a data breach between 2019 and 2023 was estimated at $4.45 million, research shows that the average financial data breach actually costs closer to $6 million.

in January of 2024, an attack on loanDepot that resulted in the potential exposure of nearly 17 million customer records could end up costing the company as much as $17 million along with the potential for

• legal fees for class-action lawsuits and compensation,
• regulatory fines for any alleged noncompliance,
• criminal charges against key stakeholders if negligence is discovered,
• operational disruptions with existing resources going toward remediation efforts, and
• reputational damage due to a loss of consumer trust.

Enhancing Financial Operations with Improved Data Security 

In 2019, a survey conducted by KRC Research found that more than four out of five consumers wanted to be notified within 24 hours of a data breach at their bank. Since then, federal banking regulators have made it a requirement for banks to notify those regulators within 36 hours and customers in accordance with the Interagency Guidance on Response Programs.

Additional strategies to secure consumer data may include the following:

• Ensure that you meet state and federal compliance when it comes to data sovereignty, data encryption, and third-party risk management regulations.
• Establish internal data governance frameworks with clear policies on access, usage, and storage based on sensitivity levels.
• Implement multifactor authentication or other user-verification processes with routine reviews to ensure that only authorized users can access sensitive data.
• Schedule security and vulnerability audits to identify and address potential security gaps, ensuring that systems remain secure against evolving methods of attack.
• Provide training and awareness programs for employees, enabling them to identify and prevent potential risks or threats to your systems.

Low-Code/No-Code Solutions for Financial Institutions

Cyberattacks are evolving, and due to the valuable nature of their data, financial organizations will continue to be one of their primary targets. Understanding what to look out for and taking the appropriate steps is the best way to protect your customers and your company, and the low-code/no-code banking solutions from Implemify are designed to help you do just that. Contact us today to learn more!