As financial organizations embrace innovation, integrating smart applications and partnering with smaller
businesses are becoming critical to maintaining competitiveness. However, these advancements bring new cybersecurity risks. This article outlines best practices emphasizing SOC2 compliance, due diligence, and robust security enforcement for third-party integrations. By implementing these strategies, financial organizations can safeguard their systems, protect sensitive data, and ensure compliance with regulatory standards.
The Cybersecurity Landscape in Finance
Financial institutions are prime targets for cyberattacks, with threat actors leveraging advanced techniques to exploit vulnerabilities. Emerging technologies, coupled with increased regulatory scrutiny, necessitate proactive and robust security measures.
Key Challenges
- Insecure Integrations: Financial institutions increasingly rely on innovative startups for solutions like payment gateways, fraud detection systems, and AI-driven analytics tools. While these tools enhance operations, they can introduce vulnerabilities if not properly vetted.
- New Acquisitions: Smaller businesses acquired by financial institutions often lack adequate cybersecurity measures, creating potential entry points for attackers.
- Regulatory Compliance: Adherence to frameworks like DORA, PCI DSS, and GDPR is crucial, with stricter penalties for non-compliance.
- Expanding Attack Surfaces: Open banking APIs, cloud adoption, and remote work have significantly increased potential entry points for cybercriminals.
Key Statistics:
- $4.88 million: Average cost of a data breach in the financial industry in 2024 (IBM).
- 64%: Percentage of financial services companies with 1,000+ sensitive files open to every employee.
Emerging Threats in 2025
The financial industry faces evolving threats, including:
- Ransomware-as-a-Service (RaaS): RaaS has made sophisticated ransomware campaigns accessible to less-skilled attackers, amplifying threats to financial institutions.
- Advanced Persistent Threats (APTs): Often state-sponsored, APTs target sensitive data over extended periods, exploiting vulnerabilities to maintain prolonged access.
- Supply Chain Attacks: Cybercriminals exploit vulnerabilities in third-party vendors to compromise
financial systems, leveraging weak security in partner ecosystems. - AI-Powered Cyberattacks: Threat actors leverage AI to launch sophisticated attacks, such as
automated phishing campaigns and adaptive malware that evolves to evade detection. - Deepfake Fraud: Cybercriminals use AI-generated deepfake technology to impersonate executives or clients, facilitating fraudulent transactions and social engineering attacks.
The Role of SOC2 Compliance
SOC2 compliance, introduced in 2011 by the American Institute of CPAs (AICPA), serves as a gold standard for ensuring that service providers manage data securely to protect clients’ interests and privacy. SOC2 focuses on the implementation and effectiveness of security controls within an organization. There are two types of SOC2 reports: Type I, which evaluates the design of controls at a specific point in time, and Type II, which assesses the operational effectiveness of those controls over a defined period. It is particularly relevant for financial institutions partnering with innovative startups and third-party vendors.
Understanding SOC2
SOC2 focuses on five trust service criteria:
- Security: Safeguarding systems from unauthorized access.
- Availability: Ensuring system uptime and reliability.
- Processing Integrity: Delivering accurate and authorized processing of data.
- Confidentiality: Protecting sensitive financial and customer information.
- Privacy: Ensuring personal data is collected, used, retained, and disposed of appropriately.
Why SOC2 Matters for Financial Organizations
Below are the key reasons why SOC 2 compliance is indispensable for financial organizations:
- Enhanced Trust: Demonstrates commitment to protecting client data.
- Risk Mitigation: Reduces the likelihood of breaches through stringent controls.
- Regulatory Alignment: Facilitates compliance with industry and international regulations.
- Streamlined Vendor Management: Ensures third-party providers meet security standards.
Leo CybSec Best Practices for 2025
As cybersecurity challenges continue to evolve, financial institutions must adopt comprehensive and forward-thinking strategies to safeguard their operations. Leo CybSec has compiled these best practices to help organizations mitigate risks, enhance compliance, and strengthen their security posture in 2025.
1. Conduct Rigorous Vendor Due Diligence
- Perform security assessments on all third-party vendors.
- Require SOC2, or other security standard reports from partners and vendors.
- Establish clear security requirements in vendor contracts.
2. Enforce Zero Trust Principles
- Perform threat modelling assessments on all applications and systems.
- Implement identity and access management (IAM) solutions.
- Continuously verify users, devices, and applications before granting access.
- Monitor and log all activity for auditing and anomaly detection
3. Implement Advanced Penetration Testing
- Test third-party applications for vulnerabilities.
- Conduct regular assessments of APIs and cloud-based systems.
- Simulate advanced phishing and social engineering attacks targeting employees and partners.
4. Strengthen Employee Training Programs
- Educate employees on identifying phishing and other cyber threats.
- Provide specialized training for teams managing third-party integrations.
- Conduct regular drills to ensure readiness against real-world threats.
5. Establish Robust Incident Response Plans
- Develop and document incident response protocols.
- Integrate 3rd party vendors into response plans.
- Regularly test and update the plans to address emerging threats.
6. Enhance Security Monitoring with AI
- Deploy AI-driven tools to detect anomalies and potential threats in real time.
- Automate repetitive tasks, such as log analysis, to improve efficiency.
- Use predictive analytics to anticipate and mitigate risks before they materialize.
7. Foster a Culture of Cybersecurity
- Promote cybersecurity awareness across all organizational levels.
- Encourage proactive reporting of potential threats and vulnerabilities.
- Align organizational goals with a strong cybersecurity-first mindset.
8. Invest in Cyber Insurance
- Evaluate and select comprehensive cyber insurance policies.
- Ensure coverage aligns with organizational risks, including third-party breaches and regulatory penalties.
- Incorporate insurance into the overall risk management strategy.
9. Establish Acquisition Security and Risk Frameworks
- Develop comprehensive security and risk frameworks tailored for acquisitions.
- Define and enforce key security requirements for potential acquisitions.
- Assess the security posture of acquisition targets using advanced technologies.
10. Collaborate with Other Financial Institutions
- Create industry-specific communication channels to share information about emerging threatsand best practices
- Participate in joint cybersecurity initiatives and threat intelligence sharing programs.
- Build a proactive community to learn from attacks targeting other institutions and mitigaterisks effectively.
Collaboration with government bodies and police departments is another critical component of a robust
cybersecurity strategy. These organizations have unique access to intelligence on cybercrime trends, emerging threats, and high-risk threat actors. By partnering with them, financial institutions can benefit from shared resources, real-time threat intelligence, and coordinated responses to large-scale attacks. Engaging with government bodies ensures alignment with national cybersecurity strategies, while collaboration with law enforcement enables institutions to report and respond effectively to cyber incidents. Additionally, financial organizations can participate in joint training exercises, enhancing their ability to address complex and evolving cyber threats. This partnership not only fortifies individual institutions but also contributes to a more secure financial ecosystem.
Conclusion
In 2025, the financial sector’s reliance on innovative startups and advanced applications requires a new
approach to cybersecurity. By prioritizing SOC2 compliance, conducting rigorous due diligence, fostering
collaboration among institutions, and enforcing security standards across all integrations, financial institutions can mitigate risks and build a secure digital ecosystem. Adopting these best practices will not only enhance security but also foster trust and compliance in a rapidly evolving industry.
About Leo CybSec
Leo CybSec specializes in cybersecurity solutions tailored to the financial sector. With expertise in SOC2
compliance, penetration testing, and risk management, we empower financial organizations of every size to stay ahead of emerging threats.
For more information, contact us at info@leocybsec.com.
