Cyberattacks rise amid rapid digitalization of financial services
Shift to cloud, fintech rise outpace capacity of some firms to protect themselves from threats
17 Nov 2021 | The Asset

Alongside its rapid digital transformation, the financial services industry has seen a steady rise in cyber threats. Ransomware and supply-chain attacks, as well as a resurgence of banking trojans and distributed denial of service (DDoS) attacks, are the top cybersecurity threats to financial institutions across the Asia-Pacific region, according to a new study.

These threats are converging with recent trends in financial services such as the wholesale move to cloud, the emergence of new fintech players competing against traditional financial institutions, and mainstream adoption of cryptocurrencies, the Financial Services Information Sharing and Analysis Centre (FS-ISAC) says in its 2021 Cyber Trends and Threats Review. FS-ISAC is global cyber intelligence sharing community focused on financial services.

"As digitalization of financial services across the Asia-Pacific region takes place at record speed, firms should be aware of the accompanying pitfalls and take steps to mitigate them," says Christophe Barel, FS-ISAC managing director for APAC. "In particular, as the region’s digital shift takes place amid organizational challenges and an undersupply of cybersecurity talent, firms may face the risk that digital expansion could outpace their capacity to adequately protect themselves from emergent cyber threats. Safeguarding against these threats will require the collective wisdom of the entire industry, with intelligence sharing as a core pillar."

As financial institutions have had to quickly expand their IT infrastructure to stay competitive, some have found that their cybersecurity apparatus has not scaled up at the same pace. According to a 2021 Check Point report, 75% of surveyed firms say the security of their public cloud infrastructure is a serious concern, as many enterprises are still getting to grips with addressing the different security challenges associated with cloud-based solutions. This may be an especially relevant issue in APAC, as many of the region’s banks are going “all-in” in embracing digitalization.

The FS-ISAC report identifies other significant trends facing the region, including the strengthening of regulatory oversight of cyber-risk management, organizational challenges to threat response, and an acute shortage in cybersecurity talent.

As cybersecurity becomes a board-level issue because of the existential risks cyberattacks can pose, financial firms must re-imagine cybersecurity policies and procedures for a new era where the industry is hyperconnected and cyber threats know no bounds.

“In 2021, third-party risk and ransomware continue to dominate the cyber-threat environment, while the resurgent threats of DDoS and trojans have also reared their heads. Sharing intelligence both globally and among members in the region can help firms understand not only new and emerging tools, techniques, and procedures used by cyber criminals but also best practices on how to defend against them,” Barel says.

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