Data breaches in this sector can have far-reaching consequences, affecting millions of customers, institutions, and economies.
Besides implementing a data protection solution specific to financial services, one of the best methods of mitigating data breaches is learning from past mistakes.
Overview of Data Breaches in the Financial Sector
Data breaches in the financial industry occur when unauthorized parties access, steal, or expose sensitive financial data. With the rise of digital banking, mobile payments, and online transactions, the attack surface for cybercriminals has widened.
These breaches often stem from sophisticated cyberattacks, insider threats, or poor cybersecurity practices.
The financial sector’s reliance on technology makes it both a target and a testing ground for advanced cyberattacks, highlighting the importance of robust cybersecurity measures.
Notable Data Breaches in Financial Institutions
1. Equifax (2017)
One of the most infamous data breaches, the Equifax incident exposed the personal information of 147 million individuals, including Social Security numbers, birth dates, and credit card details. The breach was attributed to a failure to patch a known vulnerability in the Apache Struts framework. A string of terrible cybersecurity practices made the security breach almost too easy for cybercriminals. The Equifax data breach potentially impacted more than 40% of America’s population.
2. Capital One (2019)
In March 2019, a former Amazon Web Services software engineer exploited a vulnerability in Capital One’s AWS cloud infrastructure, exposing the data of 106 million customers. The compromised information included 100 million credit card applications dating back to 2005. The magnitude of compromised data classifies this event as one of the most devastating data breaches in the financial services industry.
3. JPMorgan Chase (2014)
In 2014, cyberattackers managed to penetrate JP Morgans’ perimeter to gain the highest level of administrative privilege and achieve root access to more than 90 of its servers. Their infiltration compromised the information of 76 million households and 7 million small businesses. This attack was carried out using malware and phishing techniques.
4. Target (2013)
While primarily known as a retail breach, the Target incident affected financial services as attackers accessed payment card information for 40 million customers. The breach was traced back to a compromised vendor’s credentials.
5. SWIFT Network Attacks (2016)
Cybercriminals exploited vulnerabilities in the SWIFT financial messaging network, stealing $81 million from Bangladesh’s central bank. This attack highlighted weaknesses in third-party systems within financial ecosystems.
6. Heartland Payment Systems Data Breach (2008)
Russian hackers injected malware through a web form on Heartland‘s website, resulting in the comprised of 130 million credit and debit card numbers. Heartland was compliant with PCI DSS at the time of the incident, but it wasn’t enough to prevent the data breach.
7. Experian (2020)
An employee of the Experian South African office was persuaded to give up critical internal data by a threat actor posing as a representative for one of Experian’s clients. According to the South African Banking Risk Information Center (SABRIC), one of the organizations conducting the investigations, the breach affected around 800,000 firms and 24 million customers.
8. Block (2022)
Affecting almost 8.2 million employees, a Square (now known as Block) employee downloaded reports detailing customer information without permission. This breach occurred when they were managing procedures that were part of their daily responsibilities due to an inside danger. It takes a highly focused and tailored strategy to identify possible harmful activity inside the boundaries of an employee’s authorized procedures.
9. Desjardins Group (2019)
An employee of Canada’s largest credit union, Desjardins, gained unauthorized access to 4.2 million members’ data with the intent to cause harm to the company. It was revealed that the breach also impacted 1.8 credit card holders outside of Desjardin’s member base.
10. Flagstar Bank (2022)
One of the largest financial providers in the United States, Flagstar Bank, suffered a massive data breach, leaking the Social Security numbers of almost 1.5 million customers.
Types of Financial Data Exposed
Data breaches in the financial sector often expose:
- Personal Identifiable Information (PII) like Social Security numbers and birth dates.
- Financial records, including credit scores and loan details.
- Payment card information such as credit and debit card numbers.
- Login credentials for online banking systems.
Methods of Attack in Financial Sector Data Breaches
1. Phishing
Fraudulent emails or messages trick employees into divulging sensitive information or clicking malicious links.
2. Malware
Malware is used to infiltrate systems, steal data, or disrupt operations. Ransomware, a subset of malware, encrypts data and demands payment for its release.
3. SQL Injection
Attackers exploit vulnerabilities in web applications to manipulate databases and extract sensitive information.
4. Insider Threats
Employees or contractors with access to sensitive data misuse their privileges, either maliciously or negligently.
Consequences of Financial Sector Data Breaches
- Data breaches result in significant monetary losses due to fines, legal fees, and compensation payouts.
- Non-compliance with data protection regulations leads to heavy penalties
- Breached institutions lose customer trust, leading to a decline in business and market value.
- Exposed data is often used for fraudulent activities, such as creating fake accounts or unauthorized transactions.
Cybersecurity Measures and Prevention
1. Encryption
Encrypting sensitive data ensures it remains unreadable even if intercepted.
2. Multi-Factor Authentication (MFA)
Adding layers of verification reduces the risk of unauthorized access.
3. Security Audits
Regular audits identify vulnerabilities and ensure compliance with cybersecurity standards.
4. Employee Training
Educating employees about cybersecurity best practices reduces the likelihood of phishing and insider threats.
Conclusion
Data breaches in the financial sector highlight the critical importance of robust cybersecurity measures. From understanding the methods attackers use to the consequences of breaches, financial institutions must adopt a proactive approach to safeguard sensitive data.
CyberShield IT offers a range of services designed to help businesses secure their systems and prevent future breaches. With solutions like ITShield, Cloud Shield, CyberShield, and Audit Shield, businesses can build a comprehensive cybersecurity strategy.
Connect with our team to learn more about how we can protect your business.
