Cyber Insurance & Security in the Financial Sector: A Broker's Guide
It’s no secret that the financial sector has been a frequent target of cybercrime. Hackers have breached many financial institution networks (FINs), stolen personal information, and made off millions of dollars. In fact, according to Checkpoint, there has been a 50% year-over-year increase in cyber attacks and no sign of slowing. In recent years, however, cyber-attacks on major institutions like Capital One and the IRS have served as a call to action for financial institutions, and fortunately, many of them are taking steps to protect their data and network infrastructure from hackers, presenting a huge opportunity for brokers.
In this blog post, we will explore various aspects of cybersecurity in the financial services sector, such as the most common cyber attacks, the steps that should be taken to help your clients mitigate these threats, and tips to sell coverage to them. By the end of this post, you will have a better understanding of the current landscape and be better equipped to educate and sell your services to this market.
Top 5 Cyber Threats to Financial Companies
A successful cyber-attack on a financial institution can have devastating and lasting effects. From class action lawsuits to business closures, educating your clients on common threats and potential outcomes can help them protect themselves from becoming the next victim of a cyber attack, and you close a deal.
Here are the top 5 cyber threats to make sure your clients are prepared for and protected from.
1. Ransomware
Ransomware is a type of malware that encrypts a user's files and demands a ransom be paid in order to decrypt them. In recent years, there have been a number of high-profile ransomware attacks on financial institutions. It’s estimated that, in 2021 alone, hackers received $1.3 billion in ransomware payments.
This has led to concerns that the financial sector is particularly vulnerable to this type of attack. In addition, financial institutions are often slow to respond to security threats, making them a popular target for attackers. As a broker, if you have a client in a financial institution, it is important to make them aware of the risk of ransomware attacks and to emphasize the importance of having a plan in place in case they become the target of ransomware attacks.
2. Phishing
Phishing attacks are a growing problem in the financial sector. These attacks are a type of fraud where criminals send emails that appear to be from a legitimate company in order to trick people into giving them personal information or money. These attacks are more sophisticated and harder to detect.
Phishing attacks are one of the most common cyber attacks across industries. However, according to Statista, the financial services industry was the most attacked sector in the first quarter of 2022, with over 22% of all phishing attacks targeting the sector.
3. Web Applications Attacks
Web application cyber attacks refer to any type of attack that targets a web application or website. They aim to disrupt or gain access to the information stored on the web application or website. There are many different types of web application cyber attacks, but some of the most common include: -SQL injection, Cross-Site Scripting (XSS), Local File Inclusion (LFI), or OGNL Java Injection. In fact, one of the three worst hacks in the Financial Sector's history came as a result of SQL injection.
Heartland Payment Systems, one of the largest payroll processors in the US, were hacked in 2008 using SQL injection. This allowed the hacker access to credit card details and other financial documentation for months before the leak was found, costing Heartland $140 million in damages.
4. Distributed Denial of Services (DDoS) Attacks
DDoS cyberattacks are another common attack in the Financial Sector. The attack targets the victim’s server, overwhelming it with requests until it’s forced offline. This type of cyber attack is particularly useful against the financial sector, as it can target multiple banking IT frameworks.
Once the attack has been successful, threat actors can leverage the urgency of deadlines in the financial industry by offering to fix the DDoS attack if a ransom is paid.
5. Supply Chain
A supply chain cyber attack is a type of attack that targets the computer systems and networks of third-party vendors with the assumption that they don’t have as robust security measures around consumer data as financial firms. These attacks can disrupt the operations of the businesses they target and can cause significant financial losses.
As a broker, this may be a type of attack less obvious to your clients. Therefore, understanding the potential risk and being able to communicate them effectively could help garner the trust you need to close the deal.
Selling Cyber Insurance to Financial Services Firms
The first and most important part of selling is education. As a broker, having both broad knowledge and industry-specific knowledge of cyber security threats is key to instilling confidence and trust in your client. Confidence and trust sell.
This is especially true when it comes to the financial sector. Businesses in the financial sector are not only prone to more frequent attacks but steep government regulation and fines. Instilling a sense of confidence in a potential financial sector client means you understand what exactly is at stake in the event of a cyber attack.
Some tips to help you sell:
- Helping businesses quantify and understand the risks and costs involved with attacks
- Educate yourself on government and industry regulations
- Ensure your pitch is tailored accordingly
- Offer cybersecurity to limit risk from 1Fort
- Have an after-sale process to stay close to new clients and ensure they are satisfied with the services
- Stay informed of the changing world of financial cybersecurity and the growing list of common threats
Get Protected Today
In the financial services industry, security will always be a watchword. Most companies understand the importance of protecting themselves, however, not exactly how. With cybersecurity and cyber insurance from 1Fort, you can offer your financial sector client an all-in-one service that helps them potentially stop attacks before they happen and recover from them in the unfortunate event they do. 1Fort can help you deliver peace of mind to your clients while making your job easier.
