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The concept of Human Risk Management for financial services aims to reduce the risks posed by humans to financial organizations. The financial services sector is highly critical in terms of the assets that it deals with on a daily basis. Even a moment of slight carelessness can cause hefty losses to financial institutions. Therefore, it becomes extremely important to tackle cybersecurity incidents related to human negligence effectively.
This blog will throw more light on the concept of Human Risk Management (HRM) while paying special attention to the risks of human-based cyberattacks for financial services. It will share some real-world examples of human-based cyberattacks on financial services and the effective HRM strategies for it. Moreover, it will also elaborate on how Right-Hand’s HRM solutions can support financial services companies.
Understanding Human Risk Management
Human Risk Management is mandatory for any organization dealing with human-related cyber risks today. The focus of traditional security awareness training solely revolved around check of the box strategy, a one-size-fits-all solution.
HRM differs from traditional training in that it focuses on user behavior and risk profile, customizing training and policy updates based on real-life risky actions. HRM platforms have the capacity to integrate with the existing tech stack of an organization to enhance its cyber threat detection capabilities to the fullest. Moreover, it also presents detailed reports and statistics to enhance security postures and cultures accordingly.
In addition to this, HRM brings a seamlessly automated process that enables organizations to focus on other high-level risks while the HRM platform does the rest of the job.
The Need for Human Risk Management for Financial Services
Human-based cyberattacks have the potential to cause heavy monetary losses and other damages to financial organizations. Here are the main ones:
| Risk | How it Affects Financial Services Organizations |
|---|---|
Financial Losses | According to a report by the IMF, the financial sector has suffered from more than 20,000 cyberattacks, causing around $12 billion in losses, over the past 20 years. Generally, attacks on financial firms account for nearly one-fifth of the total cyberattacks, out of which banks are the most exposed financial institutions. |
Reputational Damage | Apart from monetary losses, the financial services firms also face noteworthy reputational damages in the long run as a result of human-based cyber attacks. They lose their clientele along with the trust of their customers. Moreover, in some cases, they even face severe consequences by losing their potential partners. |
Regulatory Consequences | Under various protection laws and regulations, financial institutions are legally bound to demonstrate that they have taken all the required steps to prevent human-based cyberattacks. If not, then legal action can be taken against them. For example, if a financial services firm is found to violate GDPR due to any cyberattack, it can be fined up to 4% of the annual global turnover or 20 million euros, whichever is greater. |
Examples of Human-Based Cyberattacks for Financial Services
Now, let’s talk about the three biggest human-based cyberattacks on financial services companies.
Phishing Attack on JPMorgan Chase
Hackers used phishing emails to gain access to the contact information of 76 million households and 7 million small businesses. JPMorgan Chase implemented additional security measures and invested heavily in cybersecurity improvements.
Insider Threat at Desjardins Group
An employee at Desjardins Group leaked sensitive personal information of nearly 2.9 million members to external parties. The breach led to significant financial and reputational damage, prompting the company to overhaul its internal security measures.
Social Engineering Attack on Barclays
Attackers used social engineering tactics to convince Barclays employees to transfer £1.3 million to a fraudulent account. The bank implemented stricter verification processes and enhanced employee awareness programs.
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Strategies for Effective Human Risk Management in Financial Services
We all understand that due to various factors, humans are always prone to make mistakes. To prevent those mistakes from becoming the root cause of a cyber-attack, we can implement the following Human Risk Management strategies within the financial services sector.
Employee Training and Awareness
Whenever employees are engaged in regular training sessions that are not exhaustive rather carried out in a fun-filled way, they are sure to mend their risky behaviors. In this way, you can make learning a highly interactive experience for your employees that can add more to their awareness. This can be done by carrying out phishing simulations, sending HRM nudges, etc.
Implementing Security Policies
While we work on enhancing employee awareness and providing avenues for effective training, it is also very important for the management to not just create security policies but also work on their implementation. This ensures that everyone in your organization stays compliant with the rules and regulations that you have set up for the security of your organization.
Leveraging Technology
Once the human and policy aspects of cybersecurity have been taken care of, it is crucial to match pace with the latest technology to prevent human-based cyberattacks. You can make use of AI and ML tools to support Human Risk Management. Moreover, you also need to ensure that whichever new cybersecurity tool you implement must integrate seamlessly with your already existing tech stack.
How Right-Hand Supports Financial Services Companies?
Because of the versatility of Right-Hand’s offerings, our HRM solutions can work equally well for financial services companies. We make use of our HRM platform to enable financial organizations to reduce the risk of human-based cyberattacks.
Customized Training Programs
The goal of Right-Hand is to come up with customized training programs that focus on risk assessment and quantification with targeted interventions wherever required. Since the financial services sector is one of the most highly attacked sectors in terms of cybersecurity, therefore, our training programs can help financial institutions strengthen their cyberdefense capabilities.
Advanced Analytics and Reporting
We work with real-time analytics and reporting so that our solutions can be tailored to the unique needs of each individual employee and the organization benefits from detailed insights on their security posture. This ensures that employees are exposed to customized training sessions just in time they need them the most.
Continuous Support and Improvement
We believe in continuously improving our HRM solutions to match the pace with the ever-growing needs of our valued clients as well as the ever-evolving cyber threat landscape. Therefore, we do not just sit back and relax after handing over a solution to our clients but also keep on enhancing its capabilities as and when needed.
Conclusion
Due to the immense human-based cyber risk posed to financial services companies, it has become more important than ever before to invest in good Human Risk Management solutions to combat these challenges effectively.
If you want to learn how our team at Right-Hand can help with Human Risk Management for financial services, book a call with us now!
