With the average cost of a data breach now reaching $4.88 million, a 10% increase over the previous year” (IBM), the stakes have never been higher for financial institutions aiming to secure both their operations and member data.
In this blog, we’ll examine insights from IBM’s 2024 Cost of Data Breach Report and Verizon's 2024 Data Breach Investigations Report to provide actionable guidance that you can take against this year's trending threats, and strengthen your organization’s defenses for the year ahead.
Synthesis of IBM and Verizon Breach Reports
IBM’s annual Cost of Data Breach report offers detailed insights into the sources of cybersecurity costs, from detection and response to long-term recovery. Meanwhile, Verizon’s Data Breach Investigations Report (DBIR) analyzes the underlying causes of breaches, shedding light on the tactics and vulnerabilities that lead to incidents. Together, these reports show where banks and credit unions are most vulnerable, highlighting prominent threat vectors such as third-party risk, insider threats, and ransomware.
By synthesizing findings from both reports, we can identify which cybersecurity controls are most effective and where institutions should focus to safeguard data and enhance resilience against attacks.
Top Five Findings for Banks and Credit Unions
Here are the top five key findings for the financial sector, derived from both IBM's 2024 Cost of a Data Breach Report and Verizon's 2024 Data Breach Investigations Report:
- Dominance of Credential-based Attacks: Both reports highlight that credential-based attacks, especially those involving stolen or compromised credentials, are prevalent in the financial sector. These attacks often stem from phishing or social engineering, allowing attackers to access sensitive information by bypassing traditional defenses
- System Intrusion as a Leading Threat Vector: System intrusions, including ransomware, remain the primary threat pattern according to Verizon. Financially motivated attackers leverage ransomware and similar methods to infiltrate systems, seeking monetary gain. The combined findings from IBM and Verizon show that financial services are heavily targeted due to the direct payoff attackers expect.
- Supply Chain Vulnerabilities and Cloud Risks: Both reports underscore the importance of managing third-party and cloud-related risks, with Verizon highlighting supply chain breaches (e.g., MOVEit) and IBM noting higher breach costs associated with data stored in public clouds. Financial institutions were advised to prioritize secure cloud configurations and vendor risk assessments.
- Impact of Security AI and Automation on Breach Costs: According to IBM, financial institutions that deployed AI and automation saw an average savings of $2.22 million per breach. Given the financial sector's high breach costs and complexity, these technologies are essential for rapid detection and response, aligning with both reports’ recommendations for stronger, AI-driven cybersecurity defenses.
- Rising Breach Costs in Financial Services: Financial institutions continue to face some of the highest breach costs across industries, with IBM reporting an average of $9.28 million per incident. These high costs are driven by the financial sector's sensitivity to regulatory penalties, customer trust impacts, and the nature of stolen data, which is often tied to identity theft and fraud.
Cybersecurity Areas to Focus on in 2025: Security Controls by Threat
Navigating cybersecurity is increasingly complex for small to medium-sized banks and credit unions. Organizations like FS-ISAC report that these institutions often struggle to maintain robust security infrastructures, leaving them reliant on outdated systems and more vulnerable to cyber threats than larger institutions. Here are essential security controls that organizations can take to address these challenges effectively:
- Prevent Credential-based Attacks with Multi-Factor Authentication (MFA) and Strong IAM Policies
- Enforce MFA: Require multi-factor authentication for all employees, contractors, and, where possible, customers to prevent unauthorized access through stolen credentials.
- Deploy Identity and Access Management (IAM): Use IAM solutions to control and monitor access, enforcing strict policies around permissions, especially for privileged accounts. Regularly review and adjust access based on user roles and responsibilities.
- Mitigate System Intrusions with Endpoint Detection and Response (EDR) and Ransomware Protection
- Invest in EDR Solutions: Endpoint Detection and Response solutions monitor, detect, and respond to suspicious activities on all endpoints.
- Implement Anti-Ransomware Measures: Regularly back up critical data and test backup restoration processes to ensure quick recovery if attacked. Consider isolating backup networks to limit the spread of ransomware.
- Strengthen Supply Chain and Cloud Security with Vendor Management and Secure Configurations
- Establish a Vendor Risk Management (VRM) Program: Assess and monitor third-party vendors for security compliance. Incorporate controls like data encryption, regular audits, and breach notification requirements in vendor contracts.
- Secure Cloud Configurations: Ensure data in public and hybrid clouds is encrypted and access tightly controlled. Use Cloud Access Security Brokers (CASB) to monitor data movement and enforce security policies across cloud environments.
- Leverage Security AI and Automation for Proactive Threat Detection
- Integrate AI-Driven Threat Intelligence and Automation: Use Security Information and Event Management (SIEM) systems with machine learning to analyze patterns and detect anomalies faster.
- Consider Managed Security Services: For small institutions with limited resources, managed services can offer threat detection and response, providing access to advanced security without the burden of managing these tools in-house.
- Address High Breach Costs with Incident Response Planning and Cyber Insurance
- Develop a Comprehensive Incident Response Plan (IRP): Define clear steps for detecting, containing, and recovering from a breach. Regularly update the IRP and conduct tabletop exercises to prepare staff for various scenarios.
- Consider Cyber Insurance: Cyber insurance can help offset breach recovery costs, providing financial support for legal fees, notification expenses, and forensic investigations.
Where Rivial Can Help
Rivial helps minimize the financial impact of a data breach by providing accurate measurement of your organization’s cyber risk. With this in-depth risk assessment, you gain insights into the potential financial risk and can better understand the scale of cyber insurance coverage needed to protect against costly incidents. This ensures you’re not only compliant with industry standards but also strategically prepared for any financial implications associated with cyber threats.
Beyond risk measurement, Rivial offers comprehensive support for incident response planning, playbook development, and control prioritization. Our solutions focus on reducing the likelihood of a breach by addressing the highest-risk areas first, effectively strengthening your organization’s security posture. With our expert guidance and tailored solutions, you can lower the chances of a breach. Our clients are always a step ahead, safeguarding their organization’s reputation and building member trust.