How To Combat Cyber Threats in the Finance Industry With a PAM Solution

According to IBM’s Cost of a Data Breach Report 2024, the average cost of a single data breach reached an all-time high of $4.88 million last year, driven by increased revenue loss, operational downtime, customer churn and regulatory fines, among other factors.

As frequent targets of cybercriminals, finance services companies face especially high risks – and the consequences of a successful breach can be particularly damaging from both reputational and compliance perspectives. In 2021, Capital One agreed to pay $80 million in fines over a 2019 data breach that affected 100 million customers. The following year, Morgan Stanley was fined $35 million over a data breach that exposed the personal information of more than 15 million consumers.

Given their access to highly sensitive financial data and systems, finance services companies must take extra precautions with privileged access credentials to minimize the risk of a devastating data breach. 

Growing cyber threats in the finance industry

The threat of cyber attacks is nothing new to the finance industry. However, as the frequency and sophistication of these attacks increase, the potential for extreme losses from a data breach also grows. Here are the most common cyber threats targeting finance services companies.

Ransomware

Ransomware attacks lock down data and systems until the compromised company pays a ransom to restore access. Financial companies managing valuable and highly sensitive data may be more willing to pay these ransoms to avoid devastating data loss.

However, businesses have no leverage in this arrangement. Even if they pay the ransom, there is no guarantee the cybercriminal will restore access to the compromised data.

Financial services companies of any size are at equal risk of a ransomware attack. In 2021, California’s Pacific City Bank was struck by a ransomware attack that locked down its computer systems. In addition to this business disruption, the hackers stole large amounts of sensitive customer information, including Social Security numbers, tax forms and loan documents. 

Phishing and social engineering

Phishing attacks are one of the most common tactics used to gain access to business systems. These attacks target employees and other authorized users through emails or text messages that appear to come from a reputable source. 

When an employee clicks on a link or downloads an attachment, they may inadvertently install malware on their device. This malware can then spread to other parts of the business network. 

The longer a breach goes undetected, the greater the losses a financial services company will face. In 2016, Belgium’s Crelan bank announced that a phishing scam targeting one of its employees resulted in the theft of $75.8 million before the breach was discovered through an internal audit.

Distributed Denial-of-Service (DDoS) attacks

DDoS attacks use a flood of online traffic to overwhelm servers, causing business websites and systems to crash and effectively halting all online services. Banks are frequent targets of DDoS attacks due to the significant damage caused when online banking portals, payment processing and other critical services are abruptly disrupted.

According to the FS-ISAC report, “DDoS: Here to Stay,” 35% of all global DDoS attacks in 2023 targeted financial companies. Several of the most prominent global DDoS attacks in recent years were perpetrated by Russian hackers targeting the UK’s financial sector.

As these forms of cyber attacks become more common, financial services companies must adopt a practical approach to securing privileged access credentials and reducing their attack surface. The most effective way to achieve this is by implementing a comprehensive Privileged Access Management (PAM) solution.

What is a PAM solution, and why is it important for financial institutions?

Privileged access management solutions are designed to secure, monitor and manage access to critical systems, applications and data – such as those used by senior managers, security administrators, financial analysts, IT personnel and auditors. 

IT administrators and security personnel can use a PAM solution to organize, manage and secure privileged credentials, eliminating access management oversights that could otherwise lead to network breaches. This provides several benefits for financial businesses, including:

• Securing sensitive financial data: PAM controls who can access sensitive data, preventing unauthorized access that could lead to financial loss or reputational damage.
• Streamlining compliance with regulations: PAM ensures access policies are enforced and keeps audit trails, helping financial businesses meet regulations such as the General Data Protection Regulation (GDPR), Payment Card Industry Data Security Standard (PCI DSS), Sarbanes-Oxley Act (SOX) and System and Organization Controls (SOC 2). 
• Reducing exposure to cyber threats: By limiting access to privileged accounts and enforcing strong access controls, PAM reduces the number of entry points for cybercriminals.
• Mitigating insider threats: PAM tracks and controls what privileged users can do, helping detect and prevent harmful actions by insiders.
• Enhancing incident response: PAM provides instant visibility into who accessed what and when, making it easier to respond quickly and limit the impact of a security breach.

How PAM helps combat cyber threats in the financial sector

A PAM solution can provide the immediate impact financial organizations need to protect their networks against future cyber attacks, strengthening their security posture through the following capabilities:

Restricted and controlled access to critical systems

A PAM solution can protect critical financial systems by securely managing access to sensitive data and applications. By storing credentials in a secure vault and enforcing Role-Based Access Controls (RBAC), PAM ensures that only authorized users can access banking platforms, payment systems and financial databases. Additionally, Just-in-Time (JIT) access provides users with temporary access to resources when needed, minimizing the exposure and reducing the risk of unauthorized access or misuse of privileged accounts.

Real-time monitoring and session recording

Continuous monitoring of network activity enables financial businesses to quickly detect and respond to potential threats by immediately restricting or revoking user permissions. PAM solutions can monitor and track privileged user activity in real time, record privileged sessions for data forensics and internal audits, and automatically alert security teams to any suspicious behavior from privileged accounts.

Automated credential rotation and password management

Many modern PAM solutions are designed to automatically rotate and manage privileged account credentials on a set schedule, ensuring that service account credentials are regularly updated and securely stored. This automated process not only reduces the risk of attackers exploiting compromised credentials but also helps financial institutions maintain compliance with industry regulations that require strict password management.

Compliance and audit preparedness

PAM solutions can help financial institutions meet compliance requirements for regulations such as GDPR, PCI DSS, SOX and SOC 2 by ensuring strict access controls over sensitive data. Features like session recording capture privileged user activity, creating a clear audit trail for audits and investigations. Detailed audit logs and automated reporting make it easier to generate compliance reports and stay prepared for both internal and external audits.

Advanced threat detection and response

The best modern PAM solutions can be integrated with Security Information and Event Management (SIEM) platforms to automatically log all events and provide comprehensive risk insights. This enables organizations to detect anomalies quickly and respond to potential threats, which helps improve security and incident response times.

Multi-cloud management

With the mix of cloud providers, on-prem infrastructure, SaaS apps and workloads, securing access to critical systems is tougher than ever. PAM solutions help centralize access in a single platform, enabling organizations to minimize their attack surface and monitor access to all infrastructure

Fortify your financial institution with KeeperPAM®

For financial institutions, cybercrime has become a fact of daily life. Without appropriate cyber defense and mitigation efforts, a single compromised credential can result in millions of dollars in losses, putting the solvency of a company at risk.

KeeperPAM offers a cloud-native, zero-trust and zero-knowledge solution for managing privileged access. With KeeperPAM, you can enforce the principle of least privilege across your entire organization, limiting access to only what’s necessary. KeeperPAM provides real-time monitoring, automated session recording and seamless integration with SIEM platforms to ensure continuous security and compliance. 
See how KeeperPAM can help your financial institution defend against emerging cyber threats – request a demo today.