OAS - CYBER THREATS: A GROWING CONCERN FOR FINANCIAL SERVICES

The financial services sector is increasingly at risk from sophisticated cyber threats. This industry, vital for the economic health of any nation, deals with sensitive data and large amounts of money on a daily basis, making it a prime target for cybercriminals. As technology advances, so too do the methods and techniques used by these attackers. It is crucial for all stakeholders in the financial sector to understand the magnitude of these threats and to implement robust measures to protect themselves and their customers. 

Desiree Gaddie - GM OAS notes "that the above statement is particularly significant for South Africa, which has been identified as the most frequently hacked country in Africa". 

Desiree further explains - "this alarming situation is attributed to several factors, including:

• Ineffective legislation and insufficient enforcement
• An acute shortage of skilled technicians
• insufficient funding

Collectively, these issues position South Africa as one of the most targeted nations in the world for cyberattacks".

Key Cyber Threats Facing the Financial Services Sector 

Cyber threats can come in various forms, each posing unique challenges and requiring specific responses. OAS highlights the most prominent risks below: 

• Advanced Persistent Threats (APTs) One of the most formidable methods are Advanced Persistent Threats (APTs). These threats involve prolonged and targeted cyberattacks wherein hackers gain unauthorized access to a network and remain undetected for long periods. APTs are typically state-sponsored or executed by high-level cybercriminal enterprises, and financial institutions are key targets for these attacks due to the immense financial gains on offer.
• Spear Phishing Unlike traditional phishing attacks that target large groups, spear phishing is a more insidious form of the threat aimed at specific individuals or organizations. By tailoring their communication to seem as credible and relevant as possible, hackers can effectively trick recipients into disclosing confidential information. In the context of financial firms, this could mean access to secure financial databases or even initiating unauthorized financial transactions. 
• Supply Chain Attacks In a supply chain attack, hackers target less secure elements in the supply network of primary targets. For financial institutions, this could mean attacking smaller, third-party vendors that have weaker security systems. Once these smaller systems are compromised, the attackers move laterally into the larger network, reaching the financial firms indirectly. This method has been popular among hackers because it exploits the interconnected nature of business operations today. 
• Ransomware Attacks Ransomware has become a prevalent method used by cybercriminals to lock out companies from their own systems, typically by encrypting data and demanding a ransom to unlock it. Financial firms are particularly vulnerable to these attacks, not only because of the financial assets they control but also due to the critical nature of their data, where prolonged access issues could have catastrophic economic implications.
• Exploitation of Software Vulnerabilities Cyber hackers continually scan for vulnerabilities in software that financial institutions use. These could be unpatched flaws, zero-day vulnerabilities, or outdated systems. Once a loophole is identified, it provides a gateway for hackers to exploit these weaknesses to infiltrate systems, deploy malware, or steal data:
  • Zero-Day Exploit: Hackers find and exploit vulnerabilities before developers are aware and able to patch the defect.
  • Unpatched Software: Frequently, organizations do not apply patches in a timely manner, which provides hackers ample opportunity to exploit these vulnerabilities.
• Manipulation of Transactional Data Manipulation of transaction data or MTI attacks involve subtly altering the amounts or destinations of financial transfers. These attacks can be highly sophisticated, involving the use of malware to intercept and alter legitimate financial transactions in real-time. For financial firms, the implications are severe as they could face financial losses, not just from the pilfered funds but also from subsequent damage to their reputations. 
• Insider Threats Insider threats are another significant risk for financial institutions. These threats come from individuals within the organization, such as employees who may have grievances, financial troubles, or have been compromised or coerced by external forces. The access and knowledge that these insiders possess make it easier for them to bypass security measures and access sensitive information. 
• Artificial Intelligence (AI) and Machine Learning (ML) in Cyberattacks Finally, the use of AI and ML in cyberattacks is a developing frontier. Cybercriminals utilize these technologies to automate attack processes, refine phishing emails by analyzing victim responses, and even to bypass advanced security protocols that rely on pattern recognition — methods financial firms often use to detect suspicious activities.

The Impact of Cyber Threats on Financial Institutions 

The impact of cyber-attacks on financial institutions can be devastating. Financial losses from such incidents can run into the billions of dollars. For instance, cyber incidents can lead to direct financial losses through theft of financial assets or sensitive corporate information, disruption of trading, and the cost of repairing affected systems. Moreover, a significant cyber incident can also affect a company's reputation, leading to reduced customer trust, loss of customers, and a decrease in market value. 

Challenges in Managing Cyber Threats in Financial Services 

One of the main challenges in managing cyber threats within the financial services sector is the dynamic nature of cyber risks. Cyber threats are continually evolving, and financial institutions must continually update their defenses against a shifting threat landscape. Additionally, the global interconnectedness of financial systems heightens the risk of contagion, meaning that a cyberattack on one institution could potentially jeopardize others. 

"This is a crucial point to consider, especially for small to medium-sized financial organizations may think they are not significant enough to attract the attention of cybercriminals". comments Desiree

Measures to Mitigate Cyber Threats 

To safeguard against these threats, financial institutions are increasingly channeling resources into cybersecurity initiatives. 

Open Architecture Systems - the premier Citrix solution provider in Southern Africa, can deliver advanced solutions that encompass:

• Zero Trust Application Delivery and Protection (ZTADP) Citrix Secure Private Access utilizes Zero Trust Network Access (ZTNA), allowing users to access only authorized applications. This approach reduces the risk of lateral movement in case of compromised credentials, unlike traditional VPNs that offer broader network access.
• Protection Against SaaS SSO-Based Attacks Citrix Secure Private Access offers robust defense against prevalent SaaS SSO-based threats, including phishing and credential stuffing. It achieves this by implementing multi-factor authentication (MFA) and continuously verifying session security. If any unusual login attempts are identified, access can be promptly revoked in real time.
• Contextual Access Control: Citrix Secure Private Access ensures that every user and device is continuously verified before being granted access to applications. It does this by leveraging contextual information such as user behavior, device health, and location.
• Enhancing Security with Observability and uberAgent: Enhance Endpoint Visibility: uberAgent provides real-time insights into the health of endpoints, usage trends, and application performance. This ensures that devices accessing custom applications adhere to security policies and standards. As a result, administrators can pinpoint potential security threats, identify anomalies in user behavior or access patterns that could suggest a security breach, and take action before an attack escalates.

Regulatory Response to Cyber Risks 

Regulators globally are responding to the increased cyber risks in the financial sector with stricter cybersecurity regulations and requirements. For example, the European Union’s General Data Protection Regulation (GDPR) imposes hefty penalties for data breaches, incentivizing companies to invest heavily in cybersecurity measures. In the United States, the Securities and Exchange Commission (SEC) has issued guidance on cybersecurity disclosures and risks management practices. 

In South Africa, the Cyber Crime Bill was enacted in 2021, however hackers take advantage of the vulnerabilities in cybercrime legislation, and the limited training resources available for law enforcement in developing nations. 

Conclusion 

Cyber threats are a major challenge for the financial services sector, risking financial losses and reputational damage. Financial institutions must implement strong cybersecurity measures and stay proactive as cybercriminal tactics evolve. Key strategies include collaboration among institutions, partnerships with government bodies, adoption of new technologies, and regulatory compliance to protect against these threats.

Key Takeaways for Financial Services 

• Understand and adapt to the evolving nature of cyber threats.
• Invest in advanced technologies and robust cyber defense mechanisms.
• Enhance employee training and awareness programs.
• Collaborate with other institutions and government entities for better cyber threat intelligence and response strategies.
• Ensure compliance with the latest regulatory requirements to mitigate legal and financial consequences.

The ongoing fight against cyber threats in finance highlights the need for vigilance, innovation, and collaboration. By addressing these challenges and employing effective countermeasures, financial institutions can safeguard themselves and their customers from the severe impacts of cybercrime.