Financial institutions handle some of our most sensitive personal and financial data. As such, they are prime targets for cyber attacks and data breaches. Cybercrime damage costs will grow by fifteen percent over the years reaching $10.5 trillion annually by 2025.
Implementing cybersecurity best practices is crucial for financial institutions to protect customer data and ensure continuity of operations. In this blog post, we will explore some of the top cybersecurity best practices that financial institutions should adopt, with a specific focus on third party risk management.
Table of Contents
Top 5 Cybersecurity Best Practices For Financial Institutions
1. Third Party Risk Management
Financial institutions often rely on third party vendors and partners for various services like cloud computing, application development, payment processing, and more. However, these third party relationships also introduce security risks if not properly managed.
Some best practices for third party risk management include:
- Maintaining an inventory of all third party connections and reviewing access privileges regularly.
- Performing comprehensive due diligence on third parties before contracting and periodically after that.
- Assessing their cybersecurity posture including policies, controls, and past breaches. Including security, privacy, and confidentiality clauses in contracts.
- Clearly defining security expectations and consequences for non-compliance.
- Implementing the principle of least privilege by restricting third party access to only what is necessary.
- Utilizing access management and vendor risk assessment tools to control this. Monitoring third party vendor networks and systems for vulnerabilities using scans and automated tools.
- Conducting on-site audits if feasible.
- Requiring third parties to report any security incidents promptly.
- Participating in incident response activities if data of the institution is involved.
- Making sure third parties maintain cyber insurance policies to cover any data breach costs and liabilities.
- Conducting periodic third party risk assessments at least annually.
- Reviewing roles, contracts and access to ensure relationships are still necessary and properly secured.
2. Identity and Access Management
Managing identities and controlling access is critical for security. Some best practices are as follows:
- Implementing strong password policies across the organization, requiring minimum length, complexity, regular rotation, and multi-factor authentication for accounts with sensitive access.
- Using role-based access control, ensuring users only have access to data and systems necessary for their roles.
- Monitoring for violations. Provisioning and de-provisioning access swiftly when users join, move to new roles, or leave the organization.
- Not allowing old inactive accounts to remain. Utilizing privileged access management tools for elevated accounts like admin and service accounts.
- Requiring additional verification for privileged access and monitoring activities.
- Implementing user behavior analytics tools to detect unusual activity that may indicate compromised credentials or insider threats.
- Alerting security teams immediately.
- Utilizing data loss prevention and rights management tools to control copying or exfiltration of sensitive data outside the network.
3. Network and Endpoint Security
Securing the network perimeter and endpoints is key to preventing breaches. Some tips are as follows:
- Segmenting the network into zones and implementing strict firewall policies controlling traffic between zones.
- Isolating the most sensitive data.
- Deploying next-gen intrusion prevention and anti-malware tools providing real-time threat blocking on endpoints and networks.
- Maintaining constant visibility. Performing regular vulnerability scans across networks and applications to find gaps before attackers do.
- Patching or addressing high-risk flaws immediately. Monitoring endpoints for signs of compromise and isolating infected devices swiftly.
- Applying the principle of least functionality to limit endpoints to only necessary software.
- Considering using a virtual desktop infrastructure (VDI) to isolate sensitive workloads and data from endpoints. VDI makes endpoints easily disposable.
- Utilizing advanced threat-hunting tools leveraging AI and threat intelligence to find adverse activity that may have evaded preventive controls.
4. Security Operations and Response
Effective security operations and incident response enables financial institutions to quickly detect and react to cyber-attacks. Recommendations include the following:
- Hiring and training a dedicated cybersecurity operations team, with defined roles and responsibilities. Working to build security expertise across the organization.
- Defining and periodically testing a cybersecurity incident response plan with playbooks covering various breach scenarios.
- Engaging incident response firms if additional expertise is required. Investing in security information and event management (SIEM) tools to aggregate, correlate, and analyze logs from across the environment. Using it to detect attacks in real-time.
- Conducting tabletop exercises that simulate cyber attacks and test response processes. Identifying any gaps and continue improving through these exercises.
- Maintaining relationships with cyber threat intelligence partners to stay on top of emerging threats, exploits, and attacker tactics, techniques, and procedures (TTPs).
- Ensuring compliance with regulations like GLBA and maintaining close coordination with regulators around cybersecurity expectations.
- Considering getting cyber liability insurance coverage for residual risks. But focusing primarily on building robust preventive controls.
5. Fostering a Security Culture
Technical controls are only part of the solution. It is equally important to build an organizational culture focused on security and risk management. Some tips include the following:
- Gaining buy-in from executives and ensuring cybersecurity is treated as an enterprise-wide risk management issue.
- Increasing security awareness among employees through training.
- Ensuring they understand threats and play a role in protecting data.
- Clearly documenting security policies and procedures. Implementing mandatory cybersecurity training upon hiring and periodically after.
- Incentivizing employees to report suspicious activity or potential weaknesses. Putting in place mechanisms to make this simple.
- Discouraging overly sharing work information on social media.
- Educating staff on social engineering risks.
- Making sure employees at all levels understand their security responsibilities. Holding them accountable for policy violations.
These are just some measures you can take to foster a security culture in your organization.
Conclusion
Financial institutions face immense threats from well-resourced and motivated cybercriminals. Their sensitive data represents a lucrative target. By implementing strong technical controls focused on high risk areas like access management and third party risk management, detecting threats early and fostering an organizational culture of security, financial firms can manage cyber risks effectively. Cybersecurity is a continuous journey of improvement. Financial institutions must continue to prioritize it at the executive and boardroom level for long term resilience.
About the Author: Nagaraj Kuppuswamy is the Co-founder and CEO of Beaconer, an esteemed enterprise specializing in managed third-party risk using the cloud-native AI-based solution. With an extensive portfolio of accolades and industry certifications, Nagaraj stands out as a seasoned expert, boasting over 16 years of dedicated involvement in the field of Cybersecurity. Throughout their career, he has predominantly focused on elevating the realm of third-party risk assessment. You can connect with him through Linkedin.