Insider Risk in the Financial Sector – Case Study – Source: securityboulevard.com

The financial sector, the powerhouse of our economy, is increasingly becoming a prime target for cyber threats. With a diverse range of organisations varying in size, presence, and services, the sector is entrusted with highly sensitive personal information. This makes it attractive to both external and internal actors. Insider risk in the financial sector, in particular, has emerged as a significant threat, leading to severe financial losses, reputational damage, and regulatory fines. This case study delves into the challenges, impacts, and potential solutions to manage insider risk effectively.

The financial sector suffers from the highest average annual insider risk costs, at $14.5 million. Insider acts such as fraud, IT sabotage, and theft of intellectual property are prevalent. The average cost of a data breach in the sector is a staggering $58.85 million USD, among the highest across all industries.

The shift to remote working and the increasing reliance on third-party systems have amplified these risks. Around 80% of financial institutions have seen an increase in the risk of insider fraud and data leakage with remote work. While robust technical solutions are in place to protect from external actors, insiders operating within the scope of these controls are often overlooked. This oversight presents a significant challenge in managing insider risk in the financial sector.

The aftermath of an insider act can be devastating. Fraud conducted by managers and upper-level staff averages $180,000 per instance. Compliance fines related to data theft, unauthorised disclosures, or fraud cases are colossal, with organisations paying around $243,101 to resolve malicious insider data breaches.

Beyond the financial implications, insider risks can severely undermine an organisation’s reputation and morale. In a sector where customer trust is paramount, the damage caused by poor insider risk management can be irreparable. The direct connection between reputation and customer trust in financial services is evident. People do not want to keep their money with an organisation they do not fully trust. While trust is hard to earn, it is easy to lose, and organisations with poor insider risk management will continue to pay the price.

Addressing insider risk requires a comprehensive, tailored approach. Signpost Six offers specialised insider risk management services and insider risk awareness trainings designed to help financial institutions navigate this complex landscape.

Our services are designed to not only identify and mitigate existing risks but also to build a resilient organisational culture that minimises the potential for future insider threats.

While we can’t reveal all our strategies here, we can assure you that our approach is comprehensive, data-driven, and tailored to the unique needs of each organisation.