Financial services has long been a compliance-driven industry. Nearly everything a bank or an investment adviser does is governed by some regulation. Usually, these rules are in place for consumer protection, but the rules the industry must follow extend to cybersecurity as well.
Unfortunately, auditors and other professionals tasked with compliance have historically developed their cybersecurity procedures in the dark. They don't always have a great view of what truly reduces risk to the organization. There's a box-checking mentality meant to assure regulators that cybersecurity procedures are in place, even when there's little guarantee that the procedures being audited add up to a secure environment.
In the field of patching vulnerabilities, for example, compliance rules tend to force companies into closing security holes that pose little risk. And that's a problem, because there is no company on the planet with the resources to fix every vulnerability on its systems.
Fortunately, the finance sector has broad experience in risk management, and more and more of these companies are adopting risk-based vulnerability management approaches that rely on objective data rather than aged "best practices."
These two countervailing observations raise important questions. Are financial services companies investing their cybersecurity resources in the right areas? Are they truly reducing cybersecurity risk while still maintaining compliance?
How Financial Services Stacks Up
New research conducted by the Cyentia Institute and Kenna Security is providing important answers to these questions.
At first glance, Cyentia's research shows that financial services companies have big challenges. On average, financial institutions have four times more security vulnerabilities than companies in other industries. But thinking this through, it's not too surprising. The footprint of assets for these firms is not only large but made up of many general-purpose computing devices, which make them ripe for a wide array of vulnerabilities.
But as we have seen in previous research, not every vulnerability poses a significant risk. In fact, we see exploitation activity for only about 5% of these vulnerabilities "in the wild." This is good news because, on average, a typical company can fix just one out of 10 vulnerabilities.
In aggregate, the financial services sector does particularly well in focusing on high-risk vulnerabilities, patching nearly 85% of them. And some companies do better than others. That's impressive given their large digital footprint, especially noting that financial services outperformed most industries in our research.
Risk management is in the DNA of most financial services companies, and that accounts for much of their success in this area. We know that attackers tend to follow well-worn paths, reusing tools and abusing the same security gaps over and over. They often focus on certain operating systems and certain software publishers because they have higher market penetration. Likewise, they also tend to focus their efforts on a select group of vulnerabilities that can be leveraged for profit.
Using tools and data science, companies can identify which vulnerabilities are more likely than not to be exploited by hackers. Risk-based vulnerability management programs are tailored to tackling these vulnerabilities first.
This is all to say that tides are changing in financial services' security practices, and this is reason for optimism. What was once a pure focus on compliance is now shifting. More and more organizations are adopting better practices to improve security and lower risk, as Cyentia's data reflects.
On the whole, the financial services industry does an impressive job of managing vulnerability risk. If they are as good at other cybersecurity disciplines as they are at vulnerability management, there's reason to be optimistic. Cybersecurity is often regarded as an expense rather than an investment, but done right, chaotic practices that never seem adequate can evolve into well-managed programs that provide real value for organizations.