How to Combat Internal Threats in the Finance Industry

Introduction  

Internal threats are a major concern in all industries, but the financial services sector is especially vulnerable due to the high value of financial data and assets they manage. While external threats often get more attention, internal threats are equally significant.

Consider these key statistics from the Securonix 2024 Insider Threat Report: 

• Insider attacks reported by organisations increased from 66% to 76% between 2019 and 2024

• Concern for malicious insiders increased from 60% to 74% during the same period

• Only 29% of respondents believe they are fully equipped with the right tools to combat insider threats

These numbers highlight the urgent need to address internal threats in the finance industry. Whether due to malice or negligence, these threats can lead to financial losses, data leaks, regulatory fines, and damage to reputation. Financial institutions must be proactive in identifying and mitigating these risks to protect their assets and maintain customer trust.

This article will explore the types of insider threats, the risks they pose to financial institutions, and practical strategies to simplify and effectively mitigate these dangers.

What are Internal Threats?  

Internal threats are cyber security risks that originate from within an organisation. These threats can come from current or former employees, external contractors, or vendors who have access to the company’s systems and data. Essentially, anyone with access to company devices or data can potentially pose an internal threat.

Internal threats significantly risk the integrity, confidentiality, and availability of sensitive information and assets. Traditional preventative security measures are often ineffective against these threats due to their internal nature.

Why is the Financial Industry at Risk from Internal Threats?  

In the finance sector, each employee has significant digital access, with an average  of 10.8 million files at their fingertips. In larger institutions, this number nearly doubles to 20 million files. Such extensive access highlights the abundance of sensitive data within financial institutions.

Securing this wealth of data against compliance requirements and internal threats is a massive challenge. As financial institutions increasingly digitise and decentralise, they create new avenues for exploitation. Rapid digitisation, cloud technology adoption, and the rise of remote work models all contribute to an environment ripe for cyber threats.

Hackers see an opportunity: exploiting internal users is the quickest path to compromising financial institutions. Therefore, protecting against internal threats is crucial for the security of the entire financial industry.

Intentional Internal Threats 

Intentional internal threats are committed by individuals with malicious intent, exploiting their access to sensitive data to achieve personal gain or harm the organisation. 

These internal threats manifest in various forms, each driven by distinct motivations: 

• Fraud: Theft, alteration, or destruction of company data to deceive stakeholders 

• Espionage: Stealing information for another organisation, often a competitor, compromising sensitive data

• Sabotage: Using legitimate access to inflict damage or disrupt operations, undermining the organisation’s functionality

• Intellectual Property Theft: Unlawful appropriation of an organisation’s intellectual property, either to sell or use for personal gain

• Revenge: Former employees seeking retribution by accessing sensitive information to tarnish an organisation’s reputation

Intentional Internal Threat Example: South Africa Postbank 2020

In 2020, South Africa’s Postbank experienced a significant internal security breach when rogue employees copied the master key. This compromised the personal data of millions of account holders and led to the replacement of 12 million bank cards, costing $58 million. 

The breach highlighted the severe impact insiders can have, especially when they have privileged access. It highlights the necessity for robust internal security measures and vigilant management of sensitive data. 

Non-Intentional Internal Threats 

Not all internal threats stem from malicious intent. Non-intentional internal threats arise from inadvertent actions or negligence by employees, leading to data breaches or security incidents.

Employees can inadvertently contribute to data breaches in several ways: 

• Phishing or Social Engineering Victims: Employees may be tricked into revealing sensitive information through fake communications posing as legitimate entities

• Using Unauthorised Devices: Devices like USB sticks, which may seem harmless, can be infected and provide hackers access to company data

• Using Unauthorised Software: Illegitimate or pirated software used by employees can contain malware and backdoors

• Loss of Company Devices: Unsecured or unencrypted company devices, when lost, can lead to data leaks

• Improper Access Control: Failure to properly manage user access, including third-party and ex-employee access, can lead to security issues

• Misconfigurations: Mistakes in setting up or managing cloud services and other systems can lead to significant vulnerabilities

Non-Intentional Internal Threat Example: UniSuper Google Cloud Misconfiguration 2024

In May 2024, UniSuper, an Australian pension fund, faced a significant disruption due to a Google Cloud misconfiguration that accidently deleted their private cloud account. This outage affected over half a million members, preventing access to their accounts for a week and impacting the fund’s $125 billion worth of assets. 

This incident highlights the potential risks associated with cloud service misconfiguration by authorised personnel. Fortunately, UniSuper had backups with an alternative service provider, which minimised data loss and facilitated the restoration of services. 

How to Detect Internal Threats 

Detecting internal threats is crucial for protecting sensitive information and assets within the finance industry. Robust detection mechanisms are essential, including employee behaviour monitoring, network activity analysis, and advanced threat detection technologies.

Behavioural patterns and digital analytics offer efficient methods for detection, helping to identify potential threats, analyse suspicious activities, and issue alerts for deviations from typical behaviour. Common indicators of insider data theft include:

Digital Warning Signs 

• Downloading or accessing significant volumes of internal data 

• Unauthorised access to sensitive data beyond job responsibilities 

• Accessing data in unusual patterns 

• Repeated requests for unauthorised resource access 

• Use of unauthorised storage devices, like USB drives 

• Network crawling and searching for sensitive information 

• Hoarding data by copying files from secure folders 

• Transmitting sensitive data via email to external recipients 

Behavioural Warning Signs 

• Attempts to bypass security measures 

• Presence in the office during non-standard hours 

• Displaying disgruntled behaviour towards colleagues or management 

• Violations of corporate policies and protocols 

• Discussions related to resignation or seeking new job opportunities 

How to Defend Against Internal Threats 

Financial institutions must adopt a multi-layered strategy that includes stringent access controls, ongoing security training for employees, and the deployment of advanced cyber security solutions. 

Least Privilege Access Policies 

Implementing access policies based on the principle of least privilege is crucial. By limiting user access to only what is necessary for their tasks and promptly revoking access when no longer needed, organisations can prevent unnecessary access accumulation and reduce potential attack surfaces. This approach denies malicious actors the opportunity to exploit overly permissive access rights.

Zero Trust Model Controls 

Implementing thorough controls based on the zero trust model strengthens security measures further. Zero Trust is a security principle advocating for the verification of all connections seeking access to systems, regardless of their origin—internal or external. Treating all internal users as untrusted entities and employing measures like time-based controls and multi-factor authentication reinforces organisations’ defences against potential internal threats and data breaches.

Comprehensive Security Training 

Promoting cyber awareness and providing comprehensive security training for all employees are essential components of a robust defence strategy. New employees and contractors should receive cyber security awareness training before gaining access to any computer system. Regular training sessions and phishing simulations should also be implemented. This helps promote a culture of vigilance among staff, enabling them to identify and report potential threats effectively.

Remote Access Monitoring and Control 

Monitoring and controlling remote access from all endpoints are critical aspects of cyber defence. Implementing intrusion detection and prevention systems for wireless networks and mobile devices is essential. Additionally, promptly revoking remote access when an employee leaves the organisation helps mitigate risks associated with remote access.

Strengthening Network Security 

Strengthening network security is vital for mitigating internal threats. This involves tailoring firewall configurations to your organisation’s specific needs. Additionally, implementing a demilitarised zone (DMZ), which is a segregated network zone isolating critical systems from direct internet access, provides an extra layer of protection. Network segmentation is also essential for restricting user movement, strengthening security measures and improving monitoring capabilities.

Conclusion 

Insider threats remain a persistent challenge in the financial sector, but they can be effectively mitigated with comprehensive strategies and proactive measures. Harnessing technological advancements and enhanced security protocols strengthens financial institutions’ defences against these internal threats.

Promoting a strong culture of security awareness among employees is also crucial. By combining these efforts, financial institutions can protect critical assets and maintain trust in their operations.

For assistance in securing your financial institution against insider threats, book a discovery call with OneCollab. Simplify your cyber security strategy and protect your business with our tailored solutions designed to give you peace of mind.