Email Security for Financial Institutions: Mitigating Risks and Ensuring Compliance
The email security crisis has been deepening in the financial services industry for decades. According to the IMF, cyberattacks are gaining momentum in the entire sector and have inflicted $2.5 billion in losses on financial organizations since 2020. Even though an abundance of regulatory requirements related to digital security must be fulfilled by banks, brokerage firms, insurance companies, and other businesses, email is increasingly being exploited by cybercriminals.
You no longer need to pull off a bank heist to pocket millions of dollars. Taking advantage of an email breach is easier for attackers and allows them to use your infrastructure’s weaknesses to demand ransom, steal personal information, or perform other fraudulent activities.
What Data Is at Risk?
Financial institutions are particularly vulnerable due to the nature of data exchanged between organizations and vendors, which includes sensitive personal information and monetary records. These data types are of more interest to cybercriminals than other data because they provide more opportunities to benefit malicious actors financially.
Banks, investment firms, insurance companies, and credit unions store vast amounts of sensitive information, including:
- Social security numbers
- Names and addresses
- Credit card information
- Account numbers
- Transaction histories
- Intellectual property
This data is highly lucrative to attackers seeking to breach insufficiently secure communication channels to commit fraud or financial theft. That’s not to mention confidential agreements and sensitive discussions that may also take place in the email landscape and become a tempting – and often attainable – target for malicious actors.
Attackers adopt various techniques to take advantage of vulnerabilities and gain unlimited access to this valuable information (more on these techniques and the ways to safeguard your email communications from them below).
The Critical Nature of Financial Sector Compliance
There are heightened risks associated with finance-related data theft or exposure through email. That’s why well-thought-out information security policies and standards must be adopted by every organization arranging compliant processes. Ensuring compliance in the financial sector is notably complex, but doing so is an essential component of your firm’s security framework.
Depending on the niche you occupy and where you’re providing financial services, you may need to meet the following regulatory requirements:
- GDPR – General Data Protection Regulation (UK, EU).
- GLBA – The Gramm-Leach-Bliley Act (USA)
- PIPEDA – The Personal Information Protection and Electronic Documents Act (Canada)
- PCI DSS – Payment Card Industry Data Security Standard (Global)
- SEC Rules – Securities and Exchange Commission (USA)
- SOX – Sarbanes–Oxley Act (USA)
- POPIA – Protection of Personal Information Act (RSA)
These regulations do not necessarily overlap. Such complexity requires financial organizations to maintain detailed compliance programs, conduct in-depth audits, and implement the most technologically advanced and secure email solutions.
Real-world examples highlight the importance of unconditional compliance. Cases like the 2023 Bank of America Vendor Data Breach or the 2019 Capital One Cyber Incident emphasize why your email security has to be fortified with compliant solutions to avoid hard-to-mitigate repercussions. Non-compliance can result in fines of up to 4% of your annual global turnover and erode client trust. Any lapses in financial data protection can lead to the loss of your business and irreversible damage to your credibility.
Data Breach Prevention (Best Practices)
Keeping data breaches at bay involves a multifaceted strategy that intertwines technology, proven processes, and human awareness. Here are the key measures to enhance your prevention mechanisms:
- Email encryption. Even if your emails are intercepted, encryption ensures they remain confidential. It must be adopted in an end-to-end way so that emails and attachments filled with financial data are encrypted on the sender’s side and are unreadable until decrypted by authorized users.
- Authentication protocols. Multiple forms of verification and role-based access controls are recommended for all financial organizations’ accounts. These erect additional security barriers that are harder to penetrate than a password alone and are best to incorporate into your internal information security policies.
- Software updates and patch management. The financial services industry is known for leveraging a range of software applications to perform or streamline tasks. Failure to keep these applications updated will put your organization in jeopardy as threats intensify sector-wise.
- Audits. You must always know what’s going on in your data security system and whether there are vulnerabilities to address. To this end, you can have audits performed by vendors specializing in security infrastructure inspections and improvements. These should cover both internal and external evaluations in the banking and finance sector.
- In-house training. Anyone who uses email within your organization can be attacked by cybercriminals. During certain attacks, your employees may not even know they’ve received a message from a malicious actor or downloaded malware. In-house training aims to make up for limited awareness of such practices and reinforce data breach prevention mechanisms across your financial institution.
You should schedule training on a regular basis. Because email security standards are ever-developing and compliance requirements tend to change amid new threats in the financial services industry, it’s vital to conduct quarterly awareness-boosting sessions to stay in the loop.
Phishing Protection (Best Practices)
Phishing scams are a veiled threat to financial institutions and the highly sensitive information they manage. With a single successful attempt, cybercriminals can get their hands on financial data that could undermine the integrity of your services and force your organization to stop operations until the issue is settled.
The good news is that reliable phishing protection does exist. You can achieve it by:
- Preventing the delivery of phishing emails. With smart filtering solutions designed for the financial sector, you can implement an email system that scans for scams by analyzing transaction-related and other emails to block anomalies. This system dissects email content, scrutinizes sender behavior, and assesses contextual signals to spot phishing threats.
- Executing test breaches. It’s better to suffer a mimicked attack in a controlled environment than a full-fledged one with unknown consequences. Financial organizations should conduct phishing drills to prepare employees across major departments to manage threats in a real-world context. You can make these simulations part of your training program with fake transaction alerts, fraudulent wire transfer requests, or spoofed communications.
Despite the protective measures you implement, there’s always a risk that a phishing attempt may be successful. To mitigate it in this case, financial institutions must maintain step-by-step incident response procedures within current financial contexts. You must have protocols for each data type and amount that may be sabotaged and follow predefined steps for isolating compromised accounts.
Automated DLP
Advanced data loss prevention (DLP) is a great email security investment for financial organizations to ensure that the account details and records they process are not inadvertently or maliciously leaked. DLP solutions are paired with machine learning (ML) technology to scrutinize email traffic and pinpoint patterns indicative of data leakage. They automatically enforce policies that prevent the transmission of sensitive data, such as blocking emails with unencrypted attachments or flagging messages containing confidential banking information.
DLP solutions can be built into an email platform. Therefore, it’s important to entrust your email communication to one that has field-tested data loss prevention policies, allows you to set permissions when forwarding messages, and provides role-based access controls.
With built-in DLP, financial institutions can reduce the manual effort of detecting anomalous email-based activities and keep standing on solid ground.
What Should You Do If You Are Under Attack?
Imagine you’re a globally recognized investment firm known for handling high-net-worth clients and overseeing multi-billion-dollar portfolios. Suddenly, your routine is disrupted when your IT team detects unusual email activity. The ocean of high-priority transactions is being initiated from an unrecognized IP address, and sensitive emails are being sent without proper authorization.
That’s what an email security breach may look like in the banking and finance industry, whether you provide online banking services or manage the pooled capital of investors. Either way, swift action is then required for financial data protection. The rule of thumb is to have a dedicated incident response team within your organization to:
- Analyze the source of suspicious email activity and confirm all the employee accounts that an attack has interfered with.
- Quarantine the affected accounts and systems and cut off connections to fraudulent IP addresses through your network.
- Notify the clients whose financial data might have been stolen or modified, inform regulatory agencies about the breach, and update stakeholders for coordinated action.
- Manage the fallout by restoring malware-infected systems, patching up the vulnerabilities exploited during the breach, and implementing a recovery protocol.
- Encourage your employees to join debriefing sessions to figure out what went wrong and assess the effectiveness of their response.
- Bolster your internal email security and data fraud prevention policies with additional solutions to steer clear of similar incidents in the future.
An adequate response plan shows your organization is mitigating the situation with the expected urgency and integrity. This minimizes reputational and operational damage inflicted by the attack.
The Path to Refined Email Security
In the face of mutating cyber threats, financial institutions must prioritize email security as a fundamental aspect of their risk management strategies. At Spambrella, we can help you stay adaptable and well-protected against potential attacks and the risks they carry.
With our DLP solutions, encryption technology, and phishing simulations, you can dramatically reduce your vulnerability to attacks and adhere to regulatory requirements. What’s more, we are Proofpoint-authorized to provide Security Awareness Training across industries, including banking and finance.
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