The financial services industry is continuously evolving, and it is essential to optimize collections strategies to maintain liquidity and minimize risk. One of the most critical choices for credit un...
Earlier this summer, cybercriminals launched a single attack that negatively impacted well over 1,000 businesses. From Quartz:
“It all started with a Miami, Florida-based IT services company called Kaseya, which provides security software for scores of large-scale cybersecurity contractors, which in turn sell their security services to thousands of businesses worldwide. After hackers breached Kaseya’s servers on July 2, they were able to quickly leap into at least 40 cybersecurity contractors’ systems. From there, they infected hundreds of businesses with ransomware over the weekend.”
This type of attack is known as a supply chain hack, and it represents a growing threat to U.S businesses—including financial institutions! In this blog post, we’ll take a deep dive into supply chain hacks and the heightened danger they pose. We’ll also give you tips for minimizing your institution’s vulnerability to this threat.
How Does a Supply Chain Hack Work?
Cybercriminals execute supply chain hacks by targeting companies’ software vendors or IT service companies in order to gain access to and exploit their clients’ systems. This type of attack greatly enhances the level of damage cybercriminals can inflict with a single security breach—it allows them to hit hundreds of birds with one stone.
In a traditional cyberattack, hackers zero in on one target and spend all of their efforts figuring out how to break into that company’s system and access their client or customer data. For large institutions, this can potentially impact thousands of their customers, but the attack is carried out within a self-contained system of the targeted company.
With a supply chain hack, however, cybercriminals target a financial institution’s trusted vendors or IT-service providers with the goal of inserting malware into the “supply chain” of software updates that they provide their clients. These vendors and IT companies tend to have hundreds of clients, so a successful supply chain attack would grant cybercriminals virtually unlimited access to all of their clients’ data and the customer data for each company or financial institution in the supply chain.
Protecting Your Institution Against a Supply Chain Attack
There are a few key steps experts recommend for helping your institution reduce the risk of incurring the negative impacts of supply chain hack:
Step #1: Conduct an audit of your software and IT service vendors.
Your organization’s first step in preventing a supply chain hack should be conducting an audit of all of your external software and IT partners that help keep your business running effectively. If you work with a lot of vendors, you may want to think about reducing this number to cut down on the amount of risk you are exposed to. The more external vendors your company works with, the greater the chance that one of your partners could suffer a supply chain hack and expose your business and your customers’ data to attack.
Step #2: Train your employees to identify common cybersecurity risks.
You train your staff to sell, provide exceptional service for your borrowers, and to operate new technology. Cybersecurity training is no different and is critical to building a workforce that is properly trained and dedicated to doing their part to prevent cyberattacks. A few things you can do to get your employees up to speed on cybersecurity include:
- Establishing policies on what—if any—type of software an employee may download to their computer
- Establish credible sources for downloading software and software updates and inform your employees that they should only trust updates from these trusted sources
- Setting complex character password requirements
- Conduct training that explains the different types of cyberattacks—including supply chain hacks—and how to identify them
- Set expectations for your employees and empower them to report suspicious links and emails to your IT department
The most important part of training your employees is to communicate the importance and the value of protecting customer and colleague information and their role in keeping these things safe.
Step #3: Mitigate Exposure by Working with Fewer Vendors
Did you know the average company’s network is accessed by 89 different vendors each week? Having fewer vendors to manage means your institution is less susceptible to the growing threat of supply chain hacks.
While working with multiple vendors was probably originally meant to streamline workflow, the reality for many institutions looks more like browser window overload that can undermine business output and may cost organizations hundreds of billions of dollars each year in lost productivity.
Leaders in the financial institution space should consider moving toward a unified platform to help minimize exposure to supply chain hacks, reduce app toggling, and regain workplace efficiency.
The SWBC Total Solution for risk management, payments, and income generation solves many vendor management challenges, including having just one integrated application to assist in product account management with robust dashboard reporting.
Your vendor management team will thank you for selecting one partner to provide essential products and services and reduce the burden of tracking multiple vendors!
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