In the financial services world, even a small or mid-sized firm holds valuable financial data that hackers are eager to exploit. In fact, they are among the most targeted industries. In 2024, Sophos found that 65% of financial services firms were impacted by ransomware. The good news is that adopting a few cybersecurity best practices in your financial services firm can drastically reduce your risk.
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What the Numbers Say About Cyber Risk in Financial Services
TL/DR: Money movement and identity theft make you a prime target. Basic cybersecurity habits by you and your team can help prevent most attacks.
While common threats like ransomware are delivered through technology, they target humans. A single click, download, or misplaced trust opens the “technological door” to attackers.
A 2025 Verizon study shows that 60% of breaches involve the human element. Oftentimes, the top attack methods are stolen passwords, phishing emails, and unpatched software.
Why Financial Services Are Prime Targets for Cybercrime
Small and mid-sized financial firms are especially vulnerable. Hackers know SMBs often have fewer defenses than big banks yet handle equally sensitive client data. Phishing and social engineering attacks – which CISA notes are built to rush or scare you – can be very costly.
According to the Cybersecurity and Infrastructure Security Agency, 84% of employees engage with phishing emails within 10 minutes of receipt, and only a fraction report the suspicious messages.
This is a big reason business email compromise scams have become so costly, racking up $2.77 billion in reported losses, according to the 2025 FBI Internet Crime Report. One click on a fake email is all it takes to bypass security and trigger fraud.
How Financial Regulations Shape Cybersecurity Expectations
Financial services firms – large or small – operate under strict regulations to protect client data. Laws and guidelines (such as the Gramm-Leach-Bliley Act, FINRA, SEC cybersecurity rules, and state-level mandates like NYDFS) require:
- Incident response planning
- Clear cybersecurity programs
- Employee security training
- Access controls
Regulators increasingly expect things like multi-factor authentication, timely breach notification, and ongoing risk assessments. If a data breach occurs and your firm wasn’t following industry cybersecurity standards, you could face fines and legal liability.
In short, building strong security habits is part of your fiduciary duty as a financial sector executive.
5 Cybersecurity Habits That Prevent Most Attacks in Financial Services Firms
Adopting these five habits can dramatically improve your company’s security posture. They address the most common attack vectors (phishing, weak credentials, outdated software, etc.) that lead to breaches.
Think of these tips as your cybersecurity best practices cheat sheet.
1. Use strong, unique passwords.
One of the simplest yet most effective habits is using strong, unique passwords (or passphrases) for each account. Weak or reused passwords are behind a decent number of breaches. In fact, roughly 22% of data breaches reviewed in the 2025 Verizon DBIR involve compromised passwords.
If an employee reuses a password that gets leaked from another site, attackers can use it to break into your business accounts. Require long, hard-to-guess passwords and never reuse them across services.
Consider using a reputable password manager (like LastPass, Bitwarden, or iCloud Keychain) to help employees generate and safely store unique logins for each account. This thwarts “credential stuffing” attacks and makes it much harder for hackers to exploit stolen passwords.
| Password & Passkeys Best Practices | |
|---|---|
|
Use a password manager. (One vault with unique logins.) |
It’s best to use passphrases. (Short sentences beat, “C0mpl3x!”) |
|
Enable passkeys where offered. (Because there’s no password to steal.) |
Retire reused, or old passwords during logins. |
2. Enable multi-factor authentication (MFA).
Passwords alone aren’t enough to protect sensitive financial accounts. Multi-factor authentication adds a second step (like a one-time code or mobile app approval) on top of the password.
This simple habit makes a big difference in security.
Microsoft’s research shows just how powerful multi-factor authentication really is. During its study, more than 99.99% of MFA-enabled accounts stayed secure during the investigation period.
Overall, it cut the overall risk of compromise by 99.22% – and by 98.56% in cases where credentials were leaked. In short, turning on MFA is one of the best ways to stop attackers in their tracks.
So, in practice, even if a hacker steals an employee’s password, they won’t be able to get in without that second factor.
Be sure to enable MFA on all your important accounts, including:
- banking platforms
- client data portals
- VPNs
Many services offer app-based authenticators (like Cisco Duo and Google Authenticator) or physical security keys – which are more secure than SMS codes. The small extra step at login massively boosts your protection. Plus, some of the regulations we mentioned earlier mandate MFA for financial firms handling non-public information.
| MFA Best Practices | |
|---|---|
|
Use an authenticator app or a hardware key. |
Avoid SMS codes when possible. |
|
Require MFA for email, financial, online retail, and cloud storage. |
Set “step-up” MFA for money moves when available. |
3. Keep devices and apps updated.
Software updates often patch critical security holes. A system left unpatched is low-hanging fruit for attackers. In fact, a 2019 ServiceNow study found 60% of breaches involved a known vulnerability that had a patch available but not applied.
Make it a habit to update your devices, applications, and security tools regularly (or enable automatic updates). This includes:
- Laptops
- Apps
- Mobile devices
- Servers
- Network equipment
Cybercriminals frequently exploit out-of-date software (as seen in incidents like the Log4j vulnerability). So, when you keep your computers and apps up-to-date with the latest security patches, you close the door on many opportunistic attacks.
In a small firm, this habit can be as simple as scheduling weekly update checks or using a managed IT service provider to push patches.
It’s a basic “cyber hygiene” step that pays off by preventing malware infections and unauthorized access through known issues.
Cybercriminals are increasingly targeting small businesses, but you don’t have to face them alone. Our guide provides actionable strategies to protect your systems, data, and reputation from malicious software.
Cybersecurity doesn’t have to be overwhelming—equipped with the right knowledge, you can create a strong, effective defense.
4. Think before you click on something in an email.
Teach yourself and your employees to pause and verify before clicking on links or attachments – especially in unexpected emails or messages. This habit of healthy skepticism can prevent phishing and identity theft.
Remember, banks and CEOs don’t typically ask you to urgently wire money via email without verification. So, always double-check suspicious requests through another channel.
Strengthen your organization’s defenses against advanced cyberattacks, like ransomware, by elevating phishing awareness with these expert tips and actionable insights.
For example, if you get an email about a “problem” with a client’s account containing a link, don’t click on it. Instead, call the client directly.
Cultivating a slow-down, “zero trust” mindset for unexpected communications is key.
This is especially critical in finance, where a single spoofed email can lead to a fraudulent wire transfer. One common policy is to verify wire transfer instructions by phone (more on that below).
| Spot Scams Quickly | |
|---|---|
|
Urgency or fear is the tell. |
Look at the sender, not the logo. |
|
Hover over links; don’t open unexpected attachments. |
Never share one-time codes or passwords. |
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When in doubt, stop and call a known number for the organization. |
|
5. Backup important files.
Regular data backups are your safety net when all else fails – they’re the last line of defense against ransomware and data loss. One of the FBI’s top ransomware advisories is to maintain good backups of critical data, because it’s the only way to recover without paying ransom.
Make it a habit to back up your business data frequently, following the “3-2-1” rule. Equally important, test your backups periodically by restoring a file to ensure the data is intact. A backup that can’t be restored is no backup at all.
Losing access to critical business data can bring your operations to a costly standstill. But by implementing a proven backup framework, you ensure you can recover quickly and minimize costly downtime. Prepare for everything from cyberattacks to natural disasters now.
Don’t neglect configuration files, financial records, and client databases in your backup plan. With solid, isolated backups, you can shrug off many attacks – even if malware wipes your servers, you’ll have clean copies to restore. This gives you some peace of mind and resilience.
These five cybersecurity habits form the foundation of a resilient financial firm. When practiced consistently, they block the most phishing, ransomware, and account compromise attempts.
4 Ways to Protect Your Money from Our CIO
Beyond general cyber habits, executives in financial services should take additional steps to safeguard funds and sensitive client information. Here are some financial data protection tips our CIO Reid Johnston recommends tailored to your industry.
1. Verify requests for wires or P2P payments.
Always verify requests for wire transfers or payment instruction changes using a known, offline method.
For example, if you receive an email from a client or colleague asking to move money, pick up the phone and call them at a known number (not the one in the email) to confirm the request.
2. Set alerts for large or unusual transactions.
Take advantage of bank and credit card security features.
Most banking apps let you instantly disable a card with a single tap. This stops unauthorized charges before they can start. Unlock it only when you need to make a purchase or process business expenses.
3. Lock cards in your banking app.
Freezing or locking your cards when they’re not in use is one of the strongest preventative measures against financial fraud.
Most banking apps let you instantly disable a card with a single tap – which stops unauthorized charges before they can start. Unlock it only when you need to make a purchase or process business expenses.
4. Be cautious with crypto, gift cards, and urgent payment requests.
Scammers often mimic clients, vendors, or even regulators to trick staff into sending untraceable payments.
For example, Requests for cryptocurrency, prepaid cards, or “expedited” transfers should always raise suspicion – especially when they come with time pressure or bypass normal approval channels.
How to Protect Your Identity
Identity theft can happen to anyone – often starting with small pieces of personal information that get misused in big ways. From tax refund fraud to AI voice scams, a few simple precautions can go a long way.
Use these six habits to protect your personal identity and family.
| 6 Simple Habits to Keep Your Identity Safe | ||
|---|---|---|
|
Place credit freezes with the major bureaus. |
Set account alerts for new credit inquiries. |
Use an IRS IP PIN for tax filing (where eligible). |
|
Shred sensitive mail and opt out of pre-approved offers. |
Watch your mail because check washing is still a thing. |
Use a family secret word to verify identities and stop AI impersonators. |
Protect Trust, Finances, and Your Future
The stakes are high for financial services because a single breach could mean lost trust, financial loss, or even business closure. Thankfully, the solution starts with everyday behaviors. By implementing the habits and tips our CIO shared in this article, you’ll block the vast majority of common attacks that come your way.
