Financial services firms are some of the most popular targets for cybercriminals. Not only do financial firms carry a significant amount of financial data, but they often store their clients’ and customers’ personally identifiable information (PII), including names, addresses, and even social security numbers.
According to a report by Fortune, the financial industry suffered the most data breaches in 2023 out of any other industry. One single attack affected nearly 1,000 institutions.
While some of these attacks were the result of technical gaps in security, many others were the result of what are called social engineering attacks. Social engineering attacks are when cybercriminals use psychological manipulation to trick individuals into divulging sensitive information or providing access to secure systems.
In this article, we’ll explore some of the most common ways social engineering attacks affect financial firms. We’ll also provide some tips on how to safeguard your institution from these threats.
An Overview of Social Engineering Attacks
Social engineering attacks can take on many forms, but the underlying objective is always the same: to obtain sensitive information or unauthorized access. These attacks often target the employees or partners of financial firms who may have valuable information such as login credentials, account numbers, or personal information.
Social engineering attacks are successful because they exploit basic human tendencies such as trust, fear, greed, or curiosity. Cybercriminals will use a variety of tactics to manipulate individuals into disclosing sensitive information or performing actions that compromise security.
Some common types of social engineering attacks include:
- Phishing emails (emails that impersonate a trusted associate or partner)
- Vishing calls (phone or VOIP calls that impersonate a trusted associate or partner)
- Pretexting (luring the victim into a vulnerable situation, then offering to resolve it in exchange for information)
- Baiting attacks (using trusted physical media like USB drives to break into systems)
- Quid pro quo scams (e.g., pretending to be support personnel and providing malicious instructions to “fix” a problem)
Although many firms have taken steps to reduce common threats like phishing, other tactics, such as pretexting and quid pro quo, are on the rise. According to the Verizon 2023 Data Breach Investigations Report, pretexting scams nearly doubled in 2023.
For example, a cybercriminal might discover that a financial firm uses a type of customer relationships management software. The scammer will then call an employee at the firm and impersonate a representative from the software company, then use the employee’s trust to gain sensitive information under the pretext of helping them solve a problem.
Why Financial Firms Are Prime Targets for Social Engineering Attacks
As mentioned earlier, financial firms are prime targets for social engineering attacks due to the sensitive information they hold. However, other factors make these institutions highly vulnerable:
Financial services firms typically have a higher value as targets compared to other industries. This is because they often hold significant amounts of money, data, and assets.
Cybercriminals who can gain access to critical systems may hold those systems hostage in exchange for money.
Customers and clients trust their financial institutions to keep their personal information secure. As such, they are more likely to fall for social engineering attacks disguised as legitimate communications from the firm.
Meanwhile, employees within the organization may be more trusting if they believe a call, email, or other communication is coming from an associate or partner of the organization.
Access to Sensitive Information
Employees of financial firms typically have access to sensitive information, making them valuable targets for cybercriminals. If an employee falls for a social engineering attack, the attacker can gain access to confidential data and systems.
How to Safeguard Your Financial Firm Against Social Engineering Attacks
Given the frequency and success of social engineering attacks targeting financial firms, institutions must implement robust security measures and educate their employees. Here are some steps you can take to safeguard your firm against these threats:
Implement Strict Security Protocols
Financial firms should have strict policies in place governing data protection and access control. These measures can include strong password requirements, two-factor authentication, and regular audits of user access.
Additionally, companies should enforce a “need-to-know” policy when it comes to sensitive information. Not all employees need access to every piece of data, and limiting access can reduce the risk of a successful social engineering attack.
Educate Employees On Common Threats
One of the most effective ways to prevent social engineering attacks is to educate employees on what these attacks look like and how they can protect themselves. Employees should be trained regularly on identifying phishing emails, vishing calls, and other common tactics used by cybercriminals.
Training can take the form of roleplaying, tests and quizzes, and discussions that allow employees to ask questions. Firms can also partner with cybersecurity providers to obtain educational materials about potential threats.
Utilize Technology Solutions
Along with strict security protocols and employee education, financial firms can also use technology to help safeguard against social engineering threats. Solutions like firewalls, intrusion detection systems, and data encryption can add additional layers of protection for sensitive information.
As social engineering attacks evolve and become more sophisticated, financial firms must stay vigilant and regularly review their security measures. Regular assessments and updates to security protocols can help mitigate potential risks and prevent successful attacks.
Protect Your Firm Against Social Engineering
Social engineering attacks pose a significant risk to financial firms due to the sensitive information they hold and the trust relationships they have with clients. These institutions must implement strict security protocols, educate employees, and utilize technology solutions to safeguard against these threats continually.
By staying vigilant and regularly reviewing their security measures, financial firms can protect themselves from social engineering attacks and maintain the trust of their clients and customers.
To learn more about how you can protect your firm against social engineering attacks, contact us at Option One Technologies today.