Threat modeling in the financial industry is a crucial cybersecurity practice that involves identifying potential threats to assets, particularly financial data and related information. This practice is increasingly essential due to the industry’s attractiveness to cybercriminals and the rise of third-party apps, which often present additional security risks.
Financial organizations in general, and banks in particular, are about as far down the cybersecurity maturity curve as any industry. That should come as no surprise. Financial organizations have been dealing with threats against their assets back to when the Pinkertons were protecting stage coaches.
If anyone knows about cyber threats, it’s a financial organization. Unlike other industries, that tend to have a variety of assets to protect, financial institutions have only one kind of asset to protect: money (and information related to that money).
Logically, these same organizations are the earliest and widest adopters of threat modeling. The old guard institutions in the financial industry do not need to be sold on the idea of threat modeling because they are already doing it.
State of the Financial Industry
Financial institutions’ assets are so appealing, it remains the most targeted industry for cyber criminals. According to a cybersecurity report by Boston Consulting Group “banking and financial institutes are 300 times more at risk of cyberattack than other companies.” And unfortunately, those efforts by cybercriminals are paying off.
According to recent statistics, the “cost of cyberattacks is highest in the banking industry, reaching $18.3 million annually per company. Recent data breach statistics showed a massive increase in the number of cyberattacks, which is why the financial industry is spending record amounts on security measures. Successful attacks on banks and financial institutions are the most costly of all, not only because of the financial losses, but also because these breaches erode user trust.”
So, if financial institutions are the best at cybersecurity, with the widest adoption of threat modeling as a practice, why all the successful breaches? Well, one of the reasons is third-party apps.
Third-party Apps Present a Security Risk
Smartphone-based apps rule the financial ecosystem, but not all financial organizations have the time or wherewithal to develop these apps, and that can be a problem according to Cybriant.
“Third-party apps promise a shortcut for financial institutions that don’t have the time or money to develop their app, but there is a safety risk here. In the race to keep up with the competition, some banks are adopting apps that may not be up to security standards. The short-term attempt to stand out can backfire big when apps are penetrated.”
A Strategy to Prevent Breaches
Two things seem to be true with regard to the financial industry when it comes to threat modeling their assets. First, threat modeling must include the entire ecosystem—including all third-party apps—not just their own systems. That may not be easy to do if they don’t have access to the app’s architecture.
Second, it appears that in the financial industry, threat modeling is necessary, but not sufficient, as a strategy for protecting assets. Other best practices for securing financial institutions include implementing multi-factor authentication, using hardware security modules, conducting security assessments and limiting access to data.
One way to speed up the threat modeling portion of securing financial assets is to automate as much of it as possible. And if you’re not sure how to do that, we suggest you check out ThreatModeler. ThreatModeler is a collaborative, threat modeling platform that comes as close to one-click threat modeling as there is.
FAQs About Threat Modeling For Financial Organizations
Why are financial organizations and banks considered to be far down the cybersecurity maturity curve?
Financial organizations and banks are considered far down the cybersecurity maturity curve because they have been dealing with threats to their assets for a long time, even back to when physical security measures like the Pinkertons were protecting stagecoaches. Additionally, they have only one primary asset to protect: money and information related to that money.
How does the adoption of threat modeling in the financial industry compare to other industries?
The financial industry is among the earliest and widest adopters of threat modeling. This is because financial institutions have always faced threats to their assets and are already practicing threat modeling to protect themselves.
What is the impact of cyberattacks on the financial industry?
Cyberattacks have a significant impact on the financial industry, with the cost being highest in this sector at $18.3 million annually per company. Successful attacks lead to financial losses and erode user trust, making them the most costly of all breaches.
Why do third-party apps present a security risk to financial organizations?
Third-party apps present a security risk because some financial institutions, in an attempt to keep up with competition, may adopt apps that do not meet security standards. This short-term approach can backfire when apps are compromised and lead to security breaches.
What are some best practices for securing financial institutions besides threat modeling?
In addition to threat modeling, best practices for securing financial institutions include implementing multi-factor authentication, using hardware security modules, conducting security assessments, and limiting access to data.