A newly published report by HYPR, an Identity Assurance Company, has uncovered a key trend: identity-related cyberattacks are eroding customer trust in the financial sector. Essentially, credential misuse and authentication vulnerabilities are rampant.
In terms of the consequences for financial services, the report reveals that 80 percent of customer would likely abandon their bank after a data breach.
Thus, there is a correlation between the escalating cyber-threat landscape and the growing apprehension among today’s banking customers. In particular the impact of identity-related cyberattacks is affecting customer loyalty.
This intolerance for security lapses is even more pronounced among younger customers, with 93 percent of those under 35 say they are prepared to close their accounts. Exits could be greater if consumers were more aware, for the survey also reveals that only 11 percent of respondents are aware of breaches affecting their banks (while 63 percent firmly believed their banks were unscathed).
The document from which these findings are drawn is titled “When Trust is Hacked: Customer Identity Security in Finance,” and it presents a thorough examination based on surveys from financial service organizations and their customers. The information in the report was derived from two surveys, encompassing both financial service organizations and their customers, with a total of 548 respondents.
The data reveals that in the past 12-months 86 percent of finance organizations were targeted by identity-related cyberattacks. Of these, 84 percent fell victim to identity fraud.
A common theme across the different cases cited is where current technologies are simply failing. There is a necessity for modernization in the financial sector’s authentication practices, especially as customers become increasingly aware of and demand stronger security measures.
In terms of economic impact, financial institutions have suffered losses of up to $4.57 million in the last year alone, more than double the $2.19 million reported in 2022. Much of this is due to insecure authentication methods.
There is also a widespread scope. Here, over three-quarters (77 percent) of financial bodies faced at least one breach due to credential misuse or authentication weaknesses.
The nature of the attacks is complex and multi-factorial. Organizations have observed a multitude of attacks with phishing attacks leading in prevalence (42 percent), followed by credential stuffing (29 percent), identity impersonation (28 percent), and push notification attacks (27 percent).
In terms of remedial actions, “institutions must proactively adapt their defences to outpace evolving threats, or risk eroding customer trust and facing significant financial losses.” This is according to Gehan Dabare, a HYPR Advisor.
