10 Steps To Enhance Your Financial Services Cybersecurity Posture

Due to all of the sensitive data they manage, financial services institutions are big targets for cyberattacks. Strong cybersecurity measures are essential to protect against these threats and safeguard the integrity of financial information. Over the past 20 years, the sector has faced more than 20,000 cyberattacks , resulting in $12 billion in losses, according to the IMF. A cyber breach not only leads to costly compliance issues but also damages an institution’s brand and erodes customer trust.

Here are key best practices to enhance cybersecurity in the financial services sector:

1. Use strong access controls.

There are a variety of access controls you can consider. A couple that I recommend include multifactor authentication, which enforces multiple forms of verification before granting access to sensitive systems and data, and role-based access control, which limits access to information based on the user’s role within the organization. With role-based access control, employees only have access to the data necessary for their job functions.

Once you have strong controls, don’t forget to conduct regular access reviews and audits to ensure that access permissions are up to date and appropriate.

2. Encrypt sensitive data.

Your organization should consider using strong encryption protocols to protect data both when it is stored and when it is being transmitted over networks. To prevent unauthorized access during transmission, you can implement end-to-end encryption for communications.

3. Regularly update software and create a patch management strategy.

Regularly update all software, including operating systems and applications, to protect against known vulnerabilities, and develop a patch management strategy to quickly address and deploy patches for critical vulnerabilities. From my experience, a company’s patch management strategy involves identifying, acquiring, testing and deploying software updates to fix vulnerabilities and improve functionality. This ensures systems are secure, which minimizes the risk of cyberattacks and downtime. Regular monitoring and documentation are also essential for effective patch management.

4. Train employees on cybersecurity best practices.

Conduct regular (quarterly or semiannual) cybersecurity training sessions to educate employees regarding the latest threats and best practices. You can then perform phishing simulations to test and improve employees’ ability to recognize and respond to phishing attempts.

You’ll also want to establish clear cybersecurity policies and ensure that all employees understand and adhere to them. Some effective cybersecurity policies for financial organizations that I have seen include implementing an enterprise security framework such as NIST CSF , fostering a cybersecurity culture by providing regular training, promoting awareness, encouraging reporting of suspicious activities, implementing strong policies and leading by example. Emphasize the importance of cybersecurity in daily operations and reward compliance. Create an environment where everyone feels responsible for protecting the organization’s digital assets.

5. Implement advanced threat detection and response.

To monitor network traffic for suspicious activity and potential threats, you can deploy intrusion detection systems. Your organization can use security information and event management systems to collect and analyze security data in real time, enabling quick detection and response to incidents.

Alongside these measures, your organization will need an updated incident response plan. Having a plan in place—and updating it often—will help you respond quickly and effectively to security breaches.

6. Secure third-party relationships.

Security doesn’t stop with your financial institution, though, so you will need to assess the cybersecurity risks associated with your partners and vendors, as well. One way to boost security in this regard is to bake cybersecurity requirements and responsibilities into your contracts with third parties. You will also want to regularly assess third-party vendors to ensure they comply with your cybersecurity standards.

7. Back up your data.

Perform regular backups of critical data so it can be restored if you’re hit by a cyberattack or experience data loss. You can store backups in a secure, off-site location to protect against physical threats. Make sure you have a disaster recovery plan in place to ensure business continuity in the event of a cyber incident.

8. Boost your network security.

You can improve the security of your network by using robust firewall solutions to protect the network perimeter and control incoming and outgoing traffic. Also consider network segmentation, which can isolate sensitive systems and data, reducing the impact of a potential breach.

Lastly, secure remote access to your network using VPNs and other security measures.

9. Perform security assessments and penetration testing.

To identify and address your financial organization’s security weaknesses, you can conduct regular vulnerability assessments. For a financial institution, this kind of assessment includes identifying, quantifying and prioritizing potential security weaknesses in systems, networks and processes to enhance overall cybersecurity resilience. Perform penetration testing to simulate cyberattacks and evaluate the effectiveness of your security measures.

You can use the results of these assessments and tests to improve your cybersecurity posture.

10. Comply with regulations and standards.

Ensure your organization is complying with regulations such as GDPR, PCI DSS and any others that apply to it. Following industry standards and best practices, such as those provided by NIST and ISO, can further help you maintain a high level of security.

By adopting these best practices, your financial services institution can safeguard critical data and preserve customer trust. Staying ahead of evolving threats demands vigilance—because today, security isn’t optional; it’s a must-have competitive advantage.

Source: https://www.forbes.com/councils/forbesfinancecouncil/2024/10/07/10-steps-to-enhance-your-financial-services-cybersecurity-posture/