Financial firms face continuous risks, including the mutating cybersecurity threat landscape, regulatory compliance, and the complex integration of multiple security solutions. Given their purpose and control of so much personal information, they are major targets of sophisticated cyber-attacks.
Some of the most common cybersecurity threats banks face include Phishing, Ransomware attacks, and Cloud threats, with phishing schemes leading the charge. I want to share a true story about the real dangers of Phishing in the financial sector, the critical importance of having IT that is resilient, and the measures financial institutions must take to protect themselves.
The Sophistication of Phishing Attacks
Phishing attacks, where cybercriminals impersonate trusted entities to deceive individuals into divulging sensitive information or transferring funds, have evolved considerably. They are no longer limited to poorly written emails from Saudi princes requesting bank details to secure their money in America. Now, attackers meticulously craft communications that mirror legitimate business transactions in language, look, and feel with an alarming degree of accuracy and believability.
A Case Involving a Commercial Real Estate Investment Bank
A commercial real estate bank in the Midwest Region regularly conducted and announced large-scale, multi-million transactions with big brand financial institutions like Chase, Citigroup, Pacific Life. Because it regularly made these public announcements to celebrate deals and promote its brand, it was easy for hackers to collect some of these announcements undetected and recreate them in detail.
The hacker’s phishing email included proper company contact info including names, titles, mailing addresses, and direct phone numbers. The phishing email used proper regulatory disclosure statements and identifiers directly from the original emails. The email’s design followed the real estate firm’s standard brand design guidelines and had the look and feel of a typical communication of this nature, right down to the sender’s name and salutation.
Serendipitously, one of the email’s targets had just met face-to-face with the real “sender.” The fact that the “sender” had made no mention of the sizable dollar request seemed odd to the recipient. Instead of transferring the money, the recipient dug a little deeper to alleviate his disconcerting feeling. A quick phone call to the real sender confirmed the fraudulent nature of the email and this hack was avoided. This scenario underscores not just the sophistication of modern phishing attempts but also the high stakes involved in digital finance operations.
Implementing Safeguards
As you can see from my story, the response to these threats involves much more than technological solutions. Employees are not absolved of responsibility for identifying and stopping hacks because there is a “technological” tool in place. These evolving threats require a fundamental shift in how transactions are verified. In the wake of these attacks, the firm adopted manual verification processes for large transactions. This meant no substantial financial transfer could be authorized solely via email. Now, employees were required to confirm the legitimacy of such requests through direct communication channels, like phone calls to the bank. This added an essential layer of human verification to protect against fraud.
How to Protect Your Financial Firm from the Phishing Fiasco
This story serves as a stark reminder of the dangers of phishing schemes.
- Continuous vigilance and education on cybersecurity threats, especially in sectors dealing with significant financial operations.
- Companies must regularly update their security protocols.
- Educate their employees on the latest phishing tactics to defend against these increasingly sophisticated attacks.
- Be aware and do not hesitate to verify elements of any transaction. The financial and reputational costs of not doing so are extremely high.
Conclusion
As phishing schemes become more elaborate, human awareness and proactive defense mechanisms become indispensable. The story of this commercial real estate firm’s close encounter with a phishing scam reveals the necessity of manual verification processes and continuous employee training on cyberthreats. In digital finance, staying one step ahead of cybercriminals is not just a best practice, it’s a critical component of operational security and financial integrity.
Protecting against phishing requires a combination of advanced security technologies, stringent processes, and, most importantly, a vigilant and informed workforce. Let this cautionary tale be a reminder of the importance of cybersecurity in safeguarding our assets and transactions against the hidden dangers of the online world.
Stay safe and security smart!
Extra Credit:
Basic IT Hygiene for Financial institutions to prevent ransomware.
Learn more about security for banks.
Waident helps financial institutions adhere to the NIST Cybersecurity Framework, an essential guide for organizations to improve their cybersecurity posture.
