Banking Digital Payments Finance Fintech Guest Posts Risk Management Security

Uncovering The Biggest Hidden Insider Risk For The Financial Industry

As part of a highly regulated, high-risk industry, financial organizations are expected to be the most secure environments. However, due to their nature, they are one of the top targets for cyberattacks. According to IBM, finance firms lose approximately $5.9 million per data breach — 28% more than the global average.

Because the risk is higher, financial services organizations require stronger security protocols to secure their systems and ensure compliance. These organizations must develop comprehensive strategies that address risk from both outside and inside the organization.

An often overlooked insider risk to organizations is ex-employees. Although the individual may be gone, former employee credentials might retain access to SaaS apps, such as Zoom, QuickBooks, and Google Workspaces, and the corresponding data. If left unchecked, these dormant accounts are ripe for takeover by bad actors, who use them to infiltrate organizations.

Not having a proper employee offboarding strategy in place creates a security risk and has wide-ranging implications for regulatory compliance requirements. The finance industry needs to modernize its offboarding process to ensure maximum security and protect its and its stakeholders’ valuable financial data.

The risks of a poor employee offboarding process 

SaaS applications have made employees’ lives easier and more connected in many ways. They enable better collaboration and make access to work more convenient, especially in the age of remote work. Because the financial industry is heavily regulated, SaaS apps can even be built with those specific compliance requirements in mind, mitigating the risk of non-compliance and potential legal ramifications.

However, poor management of SaaS apps and employee credentials could pose security risks to financial organizations — even after the employee is no longer with the company. For example, an employee may have access to a platform for trading that could contain customer profiles, financial details, and market data. Using a platform to better manage the process is certainly helpful, but this is prime information that hackers want to access.

Once an employee leaves, it’s imperative that they are properly offboarded so they don’t have access to that critical information anymore and so their vacant account can’t be used by hackers as an entry point to infiltrate the company. Leaving a vacant account unmanaged could have devastating consequences, such as data theft and monetary damage if there is no offboarding strategy in place.

A recent, high-profile example of this is when an unnamed US government state network was hacked with a former employee’s credentials. The hacker was able to access their VPN, which gave them an entry point to another current employee’s credentials, allowing them to progress further into the organization. Data was stolen and posted on the dark web, which has since triggered an investigation. This incident could have been easily prevented with an established offboarding procedure — a good lesson for all public and private organizations.

More Fintech Insights: Seamless Fiat-Crypto Transactions: The Role of On/Off-Ramp Solutions in Crypto Adoption

A modern approach to employee access management

Maintaining comprehensive offboarding protocols and regularly conducting employee access management audits are vital responsibilities for security and IT teams. Overlooking these measures within an identity hygiene strategy not only exposes vulnerabilities but also holds significant consequences for regulatory compliance adherence. However, despite its importance, it’s nearly impossible for IT teams to manually keep track of every app used within the organization, given the average management load of around 400 SaaS apps.

To have an effective, modern approach to employee access and offboarding, real-time visibility and automation are key. Establishing real-time visibility ensures that IT and security teams remain informed about the current SaaS applications in use, which individuals need access to specific data within the organization, and who currently has access. This is a particular problem because of democratized SaaS use. Often, employees download and sign up for apps to help with work without informing IT. Although this is done with no mal-intent, IT’s lack of visibility and control over these fringe SaaS apps increases risk within an organization. These apps are additional points of entry for bad actors, and other factors, such as reused passwords or poor security hygiene, create toxic combinations of risk. Security and IT teams need methods of identifying and maintaining visibility into all SaaS usage in order to mitigate risk and maintain strong security posture.

Automation is the most effective way to ensure that teams stay up to date on privileges and ensure that there are no unknown unauthorized access points within financial companies. Implementing automated tools can streamline this process and offer the necessary visibility without overwhelming teams. It can serve as a valuable asset in safeguarding financial organizations against critical security incidents and ensuring compliance is met.

In the highly targeted financial industry, every precaution must be taken to protect each organization and its stakeholders. One misstep could cause devastating repercussions, including data leaks, compliance violations, and financial loss. While it’s impossible to see a cyberattack coming, financial organizations need to take steps internally to ensure they don’t pose a preventable risk to themselves. Employee offboarding needs to be standardized and modernized to give organizations a leg up in safeguarding valuable assets and data from within.

 

Read More On Fintech: GlobalFintechSeries Interview with Marko Voutilainen, CEO at Aico

[To share your insights with us, please write to psen@itechseries.com ]

Related posts

Fintech Industry Veterans Launch Highline With $4.5 Million In Seed Funding To Improve Access To Credit for 40 Million Americans

Fintech News Desk

BriteCore Welcomes New Chief Product Officer and SVP of Services

Mohit Manoharan

CompStak Raises $50 Million Series C Funding Led by Morgan Stanley Expansion Capital

Fintech News Desk
1