No financial institution is exempt from the occasional ‘malicious insider’, who, acting alone or with outside help, can do more damage than virtually any outside fraudster.
In addition to knowing where a bank’s most vital and sensitive information is stored, a maladjusted employee has the inside track to a bank’s weak spots. Hence, it’s not surprising that attacks from inside bad actors are the most costly and take the longest time to resolve.
“An attack by any trusted party, whether an employee, contractor, or trusted vendor has the potential to be devastating,” says Keith Monson, chief risk officer for Computer Services Inc., a Paducah, Ky.-based banking vendor. “If the right controls aren’t in place, these attacks can go on for a considerable amount of time, sometimes only being detected when the insider makes a mistake or gets too greedy.”
In the financial services sector, data breaches involving employees accounted for 36 percent of incidents, according to Verizon’s annual Data Breach Investigations Report (DBIR) for 2019, up from just 7 percent in the 2018 DBIR.
Many of these attacks are likely to involve negligent employees – those who make open a phishing attachment or have their credentials taken, rather than setting out to commit intentional harm. But personal or financial factors, or professional stressors including economic recession, layoffs and the pressures of COVID-19, may push some staff over the edge.
“Employee fraud tends to occur more often in turbulent times, when even good employees may face extremely difficult financial situations,” says Shirley Inscoe, senior analyst at the Aite Group. “This current pandemic is such a situation. If an employee’s spouse loses their income and funds are very tight, even a good employee could be tempted to steal if he or she feels they have nowhere else to turn.” Inscoe’s own research found that employee-related fraud incidents and losses are “up in quite a few financial institutions compared to two years ago.”
Mathieu Auger-Perreault, director of fraud and security at Javelin Strategy & Research, agrees that given the economic downturn and surge in remote workers, “we can expect an increase of insider cases.” He points out that pressure to commit a fraud increases when someone faces financial challenges, and the opportunity to commit fraud may increase with many companies scrambling to deal with moving their workforce remote “without the proper security controls.”
More access, more data, more opportunity
Security often tends to run contrary to convenience, and the convenience and cost savings of cloud platforms may also be making malicious attacks more viable, according to Shareth Ben, executive director for field engineering at Securonix, a cybersecurity vendor that works with five of the top 10 global financial services…