As financial services become increasingly digitalised, the need for strong cybersecurity is rising. Due to its nature, the financial services sector faces a higher number of threats than most industries; sensitive customer data as well as financial information makes FS providers a prime target for cybercriminals.
2025 is expected to be a transformative year for cybersecurity in the financial services landscape, as AI begins to play a larger role both in cyber protection and cyber attacks: although AI copilots are being trained to spot fraud, cybercriminals are also learning to use AI in phishing and ransomware attacks.
The constant changes in the FS technological landscape mean regulations have to be regularly altered and updated to keep up with developments. The challenge for FS providers this year will be in keeping up with technological trends, whilst simultaneously keeping up with the regulatory changes around cybersecurity and data privacy that come with them.
The development of AI copilots with the ability to detect fraud has the potential to be a great help to financial services customers. These tools are trained to monitor customers’ financial habits and spending patterns, learning what these patterns look like to enable them to detect any anomalies or irregularities that could indicate fraud. They can also conduct real-time analysis of transactions, alerting customers promptly to enable a fast response to any detected fraud.
Despite the potentially beneficial uses of AI in cybersecurity, with the development of accessible AI tools comes a rise in cybercriminals using it to conduct attacks. Not only are the AI servers that store customers’ financial information vulnerable to attacks, but cybercriminals are using AI in increasingly clever ways to con people into giving up sensitive information: this includes phishing emails, automated calls, text messages and even voice cloning technology, which mimics family members’ voices over the phone to trick victims into believing they are talking to a trusted source.
Cybercriminals are using AI in increasingly clever ways to con people into giving up sensitive information.
Phishing, hacking and ransomware attacks are becoming more convincing with the development of AI, making them a larger threat than ever before. Malicious use of AI is developing at an equally rapid pace to fraud detection AI tools, and there is therefore an increasing need for regulations to address the use of AI in finance, and for preventative measures to be put in place to tackle the use of AI in scams. Whilst AI can be used to detect fraud, the issue lies in how to stop it being used to carry out fraud.
The threats to cybersecurity in finance are numerous, and the nature of the industry means that it is a particular target for cybercriminals, meaning financial services providers need to be particularly vigilant about cybersecurity. Here’s an overview of the most prominent threats to cybersecurity in the financial services landscape, and how to protect your business from those threats.
Phishing is the most common form of cyberattack, and is becoming more common and often more realistic with the rise of AI. Phishing is the act of tricking victims into divulging private or sensitive data, usually with the intent of accessing financial data, passwords, or an internal network.
Fraudsters will usually pose as either a reputable brand or company, or a trusted colleague or friend. This makes them more likely to successfully dupe victims into feeling safe to:
a) share private information, passwords, or bank details
b) click a link or download an attachment that will take this information from their device through malware or ransomware.
The most valuable thing that companies can do to minimise the likelihood of staff falling for a phishing scam is to educate them to a high standard on the subject. Staff should be able to spot a phishing email, phone call, text message or any other false communication, and know the necessary reporting method when these threats are identified. Companies should also have the necessary protections installed on devices to protect against phishing attempts, such as antivirus software and email authentication software.
If a member of staff does fall for a phishing scam, your business should have stringent measures in place to mitigate the risk of escalation. It is possible for your IT department to intercept a scam, however fast action is needed.
In a ransomware attack, a cybercriminal will encrypt a victim’s device to lock them out of the device, and demand money in exchange for granting the victim access to their device again.
These attacks are particularly effective against FS providers, as the data and information stored on devices in this industry is of such a sensitive nature. The risk of such a serious breach of data protection regulations means that victims of ransomware attacks in the FS industry may be more likely to pay the ransom in order to protect customer data, and therefore their company’s reputation, although the official advice from the National Cyber Security Centre is not to pay the ransom.
Ransomware attacks are often a result of a phishing scam. In order to build the strongest defences against ransomware attacks, companies should start by training staff to recognise phishing emails that may contain links to fraudulent websites where internal credentials could be stolen. If a fraudulent link is clicked, this should be reported to the IT department as quickly as possible, to increase the chances of blocking the attack before it progresses.
Threat intelligence teams should be aware of and on top of the most popular ransomware currently targeting financial systems, in order to spot the signs and intercept the risk as early as possible. Regular security tests should be run, and antivirus software and firewalls should be implemented as a protective measure. Although protection against ransomware attacks cannot be guaranteed, your business should take every possible precaution to minimise the risk of an attack.
Supply chain attacks in the financial services industry occur when third party providers (usually software providers) are compromised, creating avenues to sensitive data through less secure elements. Cybercriminals use an external provider with access to your data or systems to get into your digital infrastructure.
According to recent research by Orange Cyberdefense, 58% of large UK financial services providers fell victim to at least one supply chain attack in 2024. This means that most FS organisations should expect to face the threat of a supply chain attack, and therefore building defences against these attacks is crucial.
58% of large UK financial services providers fell victim to at least one supply chain attack in 2024.
The problem with supply chain attacks is that they can be difficult for an organisation to control: as they come through third party providers, organisations may feel that there is nothing they can do to stop these attacks if these external parties’ defences are weak. However, there are measures you can take to help protect your business from supply chain attacks. Here are the top 3:
Rapidly developing technology means that regulations are constantly evolving to accommodate new facets of the technical landscape. These regulatory changes are particularly prevalent in the financial services sector due to the strict laws around data protection.
Companies need cybersecurity experts to help them to meet these changing regulations, however the need for these experts is growing at such a rate that the industry cannot keep up with the demand.
The skills gap in the cybersecurity field is reaching critical levels, with the World Economic Forum estimating that there is a global shortage of 4 million cybersecurity professionals. 67% of organisations currently report a skills gap in cybersecurity, and that number is only growing: as society’s digital dependence continues to increase, the number of people equipped to keep up with the demands of the policies and regulations that are evolving along with that dependence is growing at a much lower rate.
This problem will only continue to complicate the cybersecurity landscape, particularly in the financial services sector, unless training and reskilling becomes a focus of the industry. If companies want to stay on top of technological advancements and maintain their status as industry leaders, they must also stay on top of the regulatory pressures that come with that status. Therefore, cybersecurity should be a lead focus of the financial services sector in 2025.
Cybersecurity is facing a difficult year, with AI hugely increasing threats to FS providers, and the industry facing a shortage of experts to deal with this increased threat. Despite AI being developed to assist with fraud detection, its overall impact on the cybersecurity landscape is a damaging one, and the regulatory pressures that come with its increased use require a new skills set in both financial services sector workers and cybersecurity professionals.
Although staff can be trained to spot phishing as a way to minimise the risk to businesses, this makes up only a fraction of the measures necessary to defend against cybersecurity threats, and the field needs a strong push towards training a new wave of professionals if the problem is to be solved.
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