As open-source AI tools become more accessible, ransomware attacks are growing increasingly sophisticated. Scammers are now using AI in targeted spear phishing attacks, where highly personalized information is used to gain access to medical or financial information.
Financial service organizations are particularly at risk when it comes to these kinds of attacks — not only do they hold and exchange large sums of money, they also store and process highly sensitive information of their customers.
The good news is that there are many steps that financial institutions can take to safeguard the data they store and protect their customers. AI is changing social engineering attacks, including the most common types of attacks on financial institutions, so following best practices can help ensure an organization is compliant and its customers can trust that their information is secure.
How AI is changing social engineering attacks
Social engineering attacks have almost doubled in recent years, accounting for 17% of all data breaches. Historically, email phishing attempts have been easy to spot because they are often riddled with spelling and grammatical errors and the email address they come from does not always look like it’s from the respective organization. Now, using generative AI like ChatGPT, attackers can create phishing emails that look very credible and are unlikely to be caught by spam filters.
In even more sophisticated scams, attackers can use deepfakes to imitate someone’s colleagues or trusted partners. Earlier this year, a finance worker at a multinational firm in Hong Kong was duped into transferring $25 million to scammers who used deepfakes to pose as the company’s chief financial officer in a video call.
Data breaches, account hacking, online banking fraud and phishing scams are the most common forms of cyber attacks on financial institutions and they are only increasing in frequency and becoming more advanced with AI. Ensuring a business is compliant with the most up-to-date security regulations is the best way to safeguard the highly sensitive data of customers.
How compliance automation protects data
Regulatory guidelines and industry standards like ISO 27001:2022, PCI DSS 4.0.1 and NIST CSF 2.0 can help companies establish strong internal security controls and processes that reduce the likelihood of cyber attacks. Compliance activities, such as risk assessments and security awareness training, help keep employees informed about critical business risks. These activities also assist in identifying procedural redundancies and ensure that all staff members are properly trained to protect sensitive data.
Compliance automation can significantly accelerate tasks that will build and maintain a strong security posture such as evidence collection, centralizing compliance data and monitoring security controls. Many compliance automation tools also flag vulnerabilities and failing controls, enabling proactive remediation. This is particularly critical for financial institutions, as catching and fixing vulnerabilities quickly means saving highly sensitive data from being exposed.
How third-party risk management can improve security posture
Financial firms often rely on third-party service providers, which can improve operational efficiency, but also expose the firm to attacks. 77% of financial organizations detected a cyberattack in the last year alone. Practicing due diligence, continuous monitoring and creating vendor management policies can help ensure all vendors are complying with strict cybersecurity protocols.
When considering whether to work with a new vendor, security leaders should ask them about their encryption practices or use of an intrusion detection system (IDS) to better understand their security practices. Leaders should also ask about client offboarding processes to understand how data will be disposed of once the vendor relationship concludes. After these assessments, rank vendors based on the sensitivity of the data they handle so more control can be used with high-risk vendors.
Creating sound vendor management policies will help ensure vendors are aligned with an organization’s security requirements, risk tolerance and compliance standards. Every vendor’s contract should include security requirements, incident reporting protocols and compliance obligations.
How AI and automation can help prevent cyber attacks
Even though AI is increasingly used in social engineering attacks, it can also be used to protect against them. Organizations that use security AI and automation were able to identify and contain a data breach an average of 108 days faster and saw cost savings of nearly $1.8 million compared to companies that do not use AI or automation for security at all.
AI can analyze emails to identify phishing attempts and monitor user behavior to detect social engineering attacks in progress. Additionally, it can customize security awareness training for individual users based on their roles, behaviors and past interactions with potential threats, thereby enhancing the effectiveness of security training.
However, while AI and automation can be incredibly useful in cybersecurity, it’s important to note that the compliance process cannot be entirely automated. Much of the evidence collection, policy management and other tasks required by a compliance framework can be automated. However, security threats are extremely nuanced and complex, necessitating the involvement of a security expert.
Human experts are your the valuable resource when it comes to defending against security threats. A security team brings contextual understanding to incidents because they know the significance of certain events based on the organization’s infrastructure and threat history. A security team should always check the work of any automated solution.
As a financial institution, being proactive about cybersecurity is the only way to protect a business and its customers. By ensuring that both humans and technology are part of the defense plan, organizations can preserve customer trust, no matter how sophisticated cyber attacks become.
