Threat Modeling in Finance Industry

Imagine a world where money loses its meaning. Not due to hyperinflation, but because hackers have crippled the very institutions that hold it safe. This is the chilling reality financial institutions face in the digital age, where cyber threats evolve faster than defenses.

The backbone of our economy, financial institutions, are undergoing a digital transformation . While they embrace innovations like decentralized finance and compete with tech-savvy FinTech startups, a shadow looms large: cybersecurity threats. As the second most targeted sector globally, they face a relentless onslaught from sophisticated adversaries exploiting the very transformation shaping their future.
 

This isn't just about stolen cash; it's about operational meltdowns, shattered trust, and reputational ruin. Legacy systems, a cornerstone of stability, become doorways for attackers. The pressure to innovate clashes with the need for impenetrable security.
 

But there's hope! In this article we will discuss the potential vulnerabilities hiding within your critical infrastructure, dissect the multifaceted costs of cyber attacks, and equip you with battle-tested best practices. We aim to  help you navigate the complex landscape of data breaches, malware, and social engineering, ensuring that your critical systems and services remain as secure as possible. 
 

Vulnerabilities and Risks in the Financial Industry:

The diverse ecosystem of the financial sector, coupled with evolving cybersecurity and compliance landscapes, presents innumerable vulnerabilities. From ransomware attacks to unregulated customer data handling, financial institutions are navigating a complex web of challenges. Some of these challenges are discussed below:

• Ransomware-as-a-Service (RaaS): The rise of RaaS introduces heightened sophistication, rapid proliferation, and attribution difficulties. Threat actors can franchise their malicious software, enabling less advanced actors to disrupt businesses, thereby imposing financial burdens on victims who refuse ransom payments.

• DDoS Attacks: Distributed Denial of Service attacks aim to render systems unavailable by overwhelming them with traffic. The financial services sector, especially in The United States, has long been a target. These attacks impact not only institutions but also external entities and stakeholders.

• Phishing and Social Engineering: Cybercriminals use deceptive emails and social engineering tactics to trick employees into disclosing sensitive information. Employee training and awareness are crucial to mitigate these risks.

• Unregulated Customer Data: Gathering large volumes of customer data brings both advantages and security liabilities. Irresponsible data use, leaks, or unauthorized access can lead to non-compliance with regulations like GDPR, resulting in legal issues and resource-intensive compliance efforts.

• Mobile Banking Security: As mobile banking grows in popularity, security risks associated with it are also increasing. Continuous testing, additional security features, and contextual authentication are vital to mitigate these risks.

• Cloud-Based Attacks: Cloud systems, while convenient, pose significant security liabilities. Financial organizations must ensure stringent security standards, compliance, and conduct regular penetration tests on cloud infrastructure.

• Increased Risk of Supply Chain Attacks: Targeting vendors in the supply chain, or Software Bill of Materials (SBOM) is a common tactic for cybercriminals. Vendors may have access to sensitive information or systems, making them attractive targets for attackers aiming to exploit weaknesses and gain unauthorized entry. Implementing a Zero Trust Architecture and Privileged Access Management can mitigate these risks.

• DeFi and Cryptocurrency: DeFi platforms, which operate on blockchain technology, aim to eliminate traditional financial intermediaries. This offers decentralized and open-source financial services. However, decentralization introduces unique risks, including smart contract vulnerabilities, crypto theft and identity leakage.  Collaboration with experienced developers is essential to secure DeFi protocols.
   

Costs Incurred by Financial Institutions Due to Cyber Attacks:

A successful cyber attack has many repercussions that can affect an organization's or business's performance and efficiency. The financial repercussions of a cyber attack extend beyond immediate and ongoing fees. Financial institutions face significant short and long-term damages, based on the severity of the attack and the extent of data exposed.  

A recent of example: Fidelity Insurance Company Breach:
 

In a recent breach at Fidelity Insurance Company, a suspected threat group gained access to the company's systems, stealing credentials. This incident resulted in the shutdown of some systems, highlighting the immediate and ongoing consequences of cyber attacks in the financial sector.

Best Practices for Cybersecurity in the Financial Sector:

To fortify the resilience of financial institutions, a proactive and collaborative approach is essential. Implementing the following best practices can significantly enhance cybersecurity:

• Response & Recovery: Develop well-documented incident response plans, communication matrices, and post-attack workflows. 
  Establish relationships with law enforcement entities, cybersecurity resources, and engage in regular cyber recovery exercises.

• Network & System Security: Assume a "breach mindset" and focus on continuous monitoring, anomaly detection, and threat hunting. 
  Secure all network components, review and disable default user accounts, conduct vulnerability scans, and adhere to a strict patch management schedule.

• Identity & Access Management: Implement multi-factor authentication, network segmentation, and role-based access control.
  Follow the Principle of Least Privilege (PoLP) to minimize the impact of compromised accounts.

• Continuous Monitoring & Employee Training: Continuously monitor security performance, addressing vulnerabilities promptly.
  Provide ongoing employee training to recognize and report phishing attempts and social engineering.

• Collaboration and Information Sharing: Foster collaboration within the financial sector and share threat intelligence to stay ahead of emerging cyber threats.
  Share critical cyber risk information, including self-published security ratings, with third-party vendors.

• Embrace Advanced Technologies: Implement cutting-edge cybersecurity technologies like artificial intelligence, machine learning, and behavioral analytics.
  Proactively identify and mitigate threats to stay ahead in the dynamic landscape of cybersecurity.

How Threat Modeler Can Help Your Financial Institution:

In the face of these challenges, threat modeling emerges as a powerful tool to understand, mitigate, and prevent cybersecurity risks. ThreatModeler offers an automated threat modeling platform that allows financial institutions to visualize their attack surface, identify potential threats, and create a proactive strategy for implementing the right security controls. ThreatModeler is equipped with the Threat Intelligence Framework, which contains content from threat intelligence authorities such as AWS (CIS), OWASP and CAPEC. ThreatModeler provides components all mapped out for Azure and other cloud environments with security requirements based on their respective guidelines. Also with its compliance adherence to standards like GDPR, HIPAA, and NIST, ThreatModeler becomes an invaluable ally in navigating the complexities of the cybersecurity landscape.

The safeguarding of financial institutions against cyber threats is an ongoing battle that demands a comprehensive, proactive, and collaborative approach. Understanding the vulnerabilities, recognizing the multifaceted costs, and implementing best practices are crucial steps in fortifying the financial sector. By embracing advanced technologies, fostering collaboration, and leveraging tools like ThreatModeler. 

Book a demo now with a ThreatModeler expert to discover how to safeguard the trust and financial well-being of your clients in the digital age.