The financial sector faces an escalating cybersecurity crisis. According to IMB’s Cost of a Data Breach 2024 Report, the average global data breach now costs organizations $4.88M— marking the steepest year-over-year increase since the pandemic. For financial institutions, the stakes are even higher: breach remediation costs soar to $6.08M per incident, 22% above the global average.
As cyber criminals leverage AI, target supply chains, and exploit regulatory complexity, financial services firms must confront the perfect storm of threats in 2025. This whitepaper examines the top 10 security risks reshaping the industry from ransomware and quantum threats to AI-driven attacks— and provides a strategic roadmap for resilience.
1. Ransomware: Escalating Threats and Costs
Ransomware attacks have surged dramatically, with 65% of financial institutions worldwide reporting incidents in 2024, up from 34% in 2021. The average ransom demand stands at $4.2 million, while the average payout has reached $7.4 million. Notably, malware attacks against finance sector firms doubled last year.
Organizations must recognize that paying a ransom may restore system access but doesn’t guarantee the removal of attacker access or prevent the sale of stolen data. Implementing robust backup strategies, data encryption, and endpoint protection is essential.
2. Phishing and Social Engineering
Phishing attacks have become more sophisticated, with 68% of identified phishing pages from August 2023 through July 2024 targeting financial institutions and their customers. Cybercriminals use counterfeit banking sites to steal credentials, which can be sold on the dark web for significant sums.
Implementing stronger identity verification, multifactor authentication (MFA), and email authentication protocols like DMARC can reduce exposure to phishing attacks.
Malicious attacks remained the top attack vector in finance, at 51%, but IT failures and human error accounted for one-fourth of all attacks, coming in at 25% and 24%, respectively.
3. Distributed Denial of Service (DDoS) Attacks
Financial organizations rely on high availability, making them prime targets for DDoS attacks. The finance industry faces significant threats from hacktivist groups and geopolitical tensions, leading to attacks that can last nearly 24 hours and peak at high data transfer rates.
Implementing robust network defenses and DDoS mitigation strategies is critical to maintaining service availability.
4. Advanced Persistent Threats (APTs)
State-sponsored APT groups, particularly from North Korea and Iran, target financial institutions to steal funds, manipulate financial systems, or gain intelligence. These groups use sophisticated tactics, including living-off-the-land techniques, to remain undetected.
Securing sensitive digital assets and enhancing transaction security are critical for the sector.
5. Insider Threats
Insider threats, often exacerbated by overprivileged access, pose significant risks. Disgruntled or malicious employees with privileged access can cause data breaches, fraud, or theft of sensitive information.
Managing access controls and ensuring sensitive information is accessible only to authorized personnel can mitigate these risks.
6. Security Debt
Flaws that remain unfixed for longer than a year exist in 76% of organizations in the financial services sector, with 50% carrying critical security debt. Delays in fixing insecure code threaten financial sector security.
Regularly updating and patching systems, especially third-party dependencies, is essential to reduce security debt.
7. Regulatory Complexity
Financial institutions face an increasingly wide range of regulations and compliance requirements. The Digital Operational Resilience Act (DORA) requirements are set to take effect across the EU in January 2025, requiring banks to establish comprehensive risk management frameworks.
In the U.S., updates to the Gramm-Leach-Bliley Act’s Safeguards Rule and the SEC’s new cybersecurity disclosure requirements are pushing firms to adopt encryption, multi-factor authentication, and disclose material incidents within four business days. New York’s NYDFS 23 NYCRR 500 imposes even tighter controls and certifications for cybersecurity readiness.
8. Cryptojacking
Cryptojacking, where malware infiltrates networks to mine cryptocurrency, has risen by 659% year-on-year by the end of 2023. Financial institutions, with their vast computational resources, are prime targets.
Monitoring network activity and securing cloud instances can help detect and prevent cryptojacking.
9. Quantum Threats to Encryption
Quantum computers threaten current encryption methods, potentially exposing sensitive financial data. The US National Institute of Standards and Technology (NIST) released its first set of quantum-resistant algorithms in August 2024.
Financial institutions should plan for a phased migration to quantum-resistant encryption to ensure consistent data security.
10. AI-Assisted Attacks
AI accelerates credential stuffing and brute-force attacks, allowing cybercriminals to test passwords rapidly. Generative AI tools can create convincing phishing scams and deepfake content.
Implementing AI governance frameworks and conducting thorough risk assessments are essential to mitigate these risks.
Scale Your Security with BigID Next
Organizations face more threats than ever before, and luck favors the prepared. Adopting a proactive and comprehensive security strategy is critical for the success and longevity of any financial institution.
BigID Next is the first modular data platform to address the entirety of data risk across security, regulatory compliance, and AI. It eliminates the need for disparate, siloed solutions by combining the capabilities of DSPM, DLP, data access governance, AI model governance, privacy, data retention, and more — all within a single, cloud-native platform.
With BigID organizations get:
- Next gen Data Security Posture Management (DSPM): DSPM extends visibility into action. BigID continuously monitors your data estate, uncovering overexposure, misconfigurations, privilege creep, and shadow data. Risk is prioritized with rich metadata and behavioral signals, so teams focus where it matters most.
- Deep Data Discovery & Contextual Classification: Visibility is the first step to control. BigID offers unmatched discovery across structured, unstructured, and semi-structured data, powered by advanced ML classifiers and contextual analysis of the data itself. This gives you clarity into what sensitive data exists, whose it is, where it lives, and how it’s at risk.
- AI-aware Security: AI introduces new risks around training data, model leakage, and prompt misuse. BigID enables discovery, classification, and policy control for AI data pipelines—protecting sensitive data inputs and outputs in GenAI workflows.
- Remediation and Risk Reduction: Most platforms surface issues. BigID solves them. Built-in remediation actions include access revocation, deletion, quarantine, and workflow escalation – directly from the platform or through integrations with ITSM and orchestration tools.
To see how BigID can help kickstart all of your organization’s security initiatives— book a 1:1 demo today.
