Booz Allen’s Top 7 Financial Services Cyber Security Trends for 2014

Senior executives and boards of directors of financial services companies are far likely to include information security and cyber attacks among their priorities today. Booz Allen recommends that they take note of seven cyber security trends that that could affect their businesses during 2014.

Acute concern among senior financial services about cyber attacks has become the new normal, according to Booz Allen. Whereas five years ago, senior executives and board members would have listed concerns such as regulatory compliance and liquidity risk as among their top concerns, they are far likely to include information security and cyber attacks among their priorities today. The McLean, Va.-based consulting company has released a list of the top seven Cyber Security Trends for the coming year.

In recent years, executives have watched the landscape change, seeing how DDoS attacks from the Izz ad-Din al-Qassam Cyber Fighters had the potential to destroy data, and reputations, according to Booz Allen. They have learned that cyber threats attack a bank wherever it does business, not just where it is headquartered. And they have simultaneously witnessed the critical benefits of public-private information sharing. Companies need to balance benefit and threat, and gain insight into the right amount of resources to invest in solutions, the consultant suggests.

Bill Stewart, Booz Allen.

Bill Stewart, Booz Allen.

“Our conversations with clients have significantly evolved from a focus on threats and capabilities to creating a balanced and holistic cyber program that responds to an institution’s critical business risks, while considering the new realities of a complex and interconnected operating environment,” comments Bill Stewart senior VP and head of Booz Allen’s commercial finance program.
“Threat actors continue to grow in sophistication, driving our clients to respond.”

Simply increasing spend is not the always the best option, Stewart cautions, recommending that financial services companies develop programs that respond to business risks within a rational expenditure profile.

Booz Allen lists the following as the top financial services cyber security trends for 2014:

  1. Banks generate and receive threat intelligence, but is it useful? – Major financial institutions are starting to understand that there are enormous volumes of potentially relevant information, but actionable intelligence is more difficult to identify. Fusing threat intelligence with other disciplines such as incident response and fraud is a proven method for connecting data elements to create actionable intelligence. Although 100 percent accuracy can only be a goal, an active defense is critical to protecting against threats that are exponentially smarter with each attack.
  2. Mobile security platform weaknesses are giving rise to new threats – The Perkele Trojan – a crimeware kit — and other cross-platform malware have identified large gaps in mobile device security. These threats take advantage of weaknesses in mobile device platforms when information is sent to a hacker who then “owns” the device. Although Perkele has not yet spread globally, it is expected to rapidly grow beyond the Middle East during the 2013 December holiday season as consumers’ online purchases increase.
  3. Developing countries with growing liquidity will see more attacks on their local banks – As the saying goes, criminals go where the money is. Countries across the Middle East, Latin America and Asia Pacific are making great strides in modernizing their economic infrastructures, which puts them on sophisticated attackers’ radar. The Saudi Arabian Monetary Agency says that fraudulent operations target Saudi and GCC banks once every 14 seconds.
  4. Mid-tier banks and non-banking financial institutions beware – Attackers are moving from large-size banks to regional and mid-tier due to their lack of security. Unlike their larger cousins, mid-tier and regional banks, wealth management organizations, hedge funds, etc., often lack the financial, technology and manpower to introduce widespread cyber security protections. When grouped together, these organizations are like a row of dominos that, when attacked, can create a cascade of systemic risks that could impact banks of any size.
  5. Thwarting insider threats requires firm-wide planning and preparation – Whether an employee accidentally shares passwords or falls prey to a social engineering attack, the cyber “hygiene” challenges of today can no longer be a responsibility solely owned by IT. Banks need to develop multi-disciplinary teams that include IT, human resources, internal communications, marketing and legal to communicate to all staff the importance of being cyber risk aware and knowing what to do when a concern arises.
  6. The NIST framework creates challenges for financial firms while opening the door for liability protections from a growing cyber security insurance industry The NIST cyber security framework moves financial services firms closer to a set of voluntary guidelines that would create a de facto “standard of care,” which would then make private sector enterprises liable in the event of cyber breaches in which PII or other valuable data is destroyed or taken over by attackers. While this creates liability risk for banks, it also opens the window for the insurance industry to offer policies that help firms offset this liability.
  7. Big data demands data-level security, while offering a broader cyber solution – Banks depend on data. As operational data is moved to the cloud, proper fine-grained security controls are necessary to ensure banks not only avoid sharing sensitive data, but also defend against adversaries moving laterally across their data sets. As part of this transition, financial institutions have the opportunity to upgrade security architectures and integrate improved controls. In addition, this new architecture can allow for the deployment of advanced analytics to deal with enormous volumes of security data to better identify trends of malicious behavior.

“As financial institutions increasingly deploy mobile and cloud technologies and integrate their partners, suppliers and customers, their data perimeters are becoming much harder to define. As a result, some are essentially redefining the concept of a network perimeter,” Stewart observes. “They do this by developing a much more dynamic cyber security approach that includes actionable threat intelligence, advanced adversary hunting as well as data protection and access controls developed at a much greater degree of granularity.”

Anthony R. O’Donnell // Anthony O'Donnell is Executive Editor of Insurance Innovation Reporter. For nearly two decades, he has been an observer and commentator on the use of information technology in the insurance industry, following industry trends and writing about the use of IT across all sectors of the insurance industry. He can be reached at [email protected] or (503) 936-2803.

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