Research | 3 mins
Financial institutions face an array of cybersecurity challenges, including third-party vendor risks. With the financial sector relying heavily on third-party services and applications, the attack surface is wider than ever before, making it a prime target for cybercriminals.
In fact, the number of cyberattacks has nearly doubled since before the COVID-19 pandemic, and almost 20% of all reported incidents impact financial firms. This heightened exposure increases the urgency for stronger, proactive cybersecurity measures to protect sensitive data and critical infrastructure.
The Growing Threat of Third-Party Vendor Risks
Third-party vendors play an essential role in the daily operations of financial institutions, providing services that range from cloud storage to HR tools. However, each new vendor also introduces a new set of risks. These vendors often have access to sensitive data, making them an attractive entry point for hackers. Misconfigured software, unpatched vulnerabilities, or unsecured infrastructure from these third parties can quickly turn into a cybersecurity nightmare.
A real-life example of this vulnerability was the infamous SolarWinds attack, where hackers exploited the software supply chain and infiltrated its development to introduce malware into the networks of thousands of organizations. Financial institutions, with their vast pools of sensitive data, are especially appealing targets for such attacks.
What Makes Financial Institutions So Vulnerable?
Financial services companies hold a significant amount of sensitive client information, making them a target-rich environment for sophisticated threat actors. Unfortunately, many of these institutions may not have full visibility over the third-party vendors they rely on. Common risks include:
-
Misconfigured cloud services (e.g., AWS S3 buckets)
-
Vulnerabilities in third-party software, such as outdated versions or known security weaknesses
-
Shadow IT, where employees use unauthorized applications without the security team’s knowledge
-
Open-source components that may have been compromised by attackers
In addition, cybercriminals are able to access data through AI, machine learning, and cloud-based services, all of which increase the risk of cybercrime in the financial sector.
Why Offensive Cybersecurity is Essential for Mitigating Third-Party Vendor Risks
Defensive cybersecurity is no longer enough. The traditional approach of building a strong perimeter has proven insufficient, especially when third-party vendors are involved.
"Attackers are targeting financial services organizations at their weak points: the consumer, web applications, and availability because that’s what works," says Martin McKeay, Security Researcher at Akamai and Editorial Director of the State of the Internet / Security Report. "Businesses are becoming better at detecting and defending against these attacks, but point defenses are bound to fail.”
Offensive cybersecurity—where institutions proactively seek vulnerabilities from a hacker’s perspective—provides a better defense against today’s evolving threats.
By continuously monitoring your external attack surface and scanning third-party applications for potential weaknesses, you can uncover and mitigate risks before they lead to a breach.As third-party vendor risks continue to rise, financial institutions must take a proactive approach to securing their environments. Implementing offensive cybersecurity strategies, like those offered by Hadrian, ensures your organization stays one step ahead of cybercriminals
For a deeper dive into the cybersecurity challenges facing the financial sector and how to address them, download our latest whitepaper: The Financial Sector Against Today’s Tough Cybersecurity Risks.
