After an unrelenting year of fighting off cyber threats, the financial services sector should expect more of the same or even worse, as nation-state hacking campaigns are expected to mirror geopolitical tensions and ransomware gangs retool to dodge increased scrutiny, according to an industry group report.
The Financial Services Information Sharing and Analysis Center, known as FS-ISAC, said in its annual report on cyber threats that global tensions could fuel further attacks by state-backed hackers and patriotic hacktivists. In addition, after a series of devastating breaches on the software supply chain, the group warned that its members need to be wary of potential nation-state meddling in products and services being used.
“We expect current trends to continue and possibly worsen over the next year,” according the report, which was released on Thursday. Saying that cybersecurity is “no longer just a back-office cost,” the group warned that cyber threats pose critical business risks, including operational disruption, lawsuits and credit downgrades.
FS-ISAC, which shares cyber intelligence among financial institutions around the world, published the report at a time when Russia’s invasion of Ukraine has kept organizations in the U.S. and elsewhere on alert for possible retaliatory attacks. So far, those fears appear largely unrealized, and cyberattacks have played a smaller role in the conflict than many predicted.
The report represents a relatively rare example of an industry publicly acknowledging cyber risks and encouraging its members to prepare for them.
In an interview about the report’s findings, Teresa Walsh, who leads FS-ISAC’s global intelligence office, said the biggest worry remains a cyberattack that disrupts members’ ability to conduct business. Industry leaders, meanwhile, have previously sounded the alarm about the possibility for global conflicts to erupt into digital attacks capable of destabilizing the financial system.
At a January event, Goldman Sachs Group Inc. President John Waldron said the potential for a cyberattack that “hits at the core of the financial markets” poses a significant danger.
“It doesn’t get enough attention,” Waldron said. “When you sort of marry what’s going on with Russia and Ukraine and China and other actors around the world geopolitically, you have to come back and think that one of their major weapons is cyber.”
The FS-ISAC report details a year of relentless cyberattacks globally in which the group raised its threat level from guarded to elevated three times. It typically does so once a year. The threat level system follows a color scheme, with green denoting a guarded status and yellow meaning elevated. However, the threat level wasn’t raised to high (orange) or severe (red) last year, according to the group.
The organization also hosted five member-wide webinars last year to address a security incident with the potential to impact the financial services sector, Walsh said. Typically, FS-ISAC hosts one such “spotlight” session annually.