Regulatory concerns may have slowed initial SaaS adoption for financial services companies, but today, many rely heavily on apps like Salesforce, Microsoft 365, and ServiceNow to manage their operations. Now, fully invested, financial services companies are faced with the challenge of safeguarding sensitive financial data that is stored off-prem. At the same time, they need to eliminate configuration drifts that make them non-compliant with SOC2, SOX ITGC, and DORA standards.
Failure to do so can be disastrous. Breaches could expose sensitive financial data, leading to potential financial losses and serious damage to the company’s reputation. The erosion of customer trust and loss of business might pale in the face of hefty fines and penalties from regulators. Neglecting SaaS security – or even using tools like CASB that aren’t very good at securing SaaS applications – poses significant financial risks and could undermine the integrity and viability of the entire organization.
So what are the dangers facing financial institutions, and what can they do to ensure their SaaS applications are both compliant and secure?
SaaS Risks in the Financial Industry
A High-Value Target
Financial services companies are high-value targets for threat actors. In addition to the funds they manage (which threat actors want to steal), they have a wealth of financial data that cybercriminals can use to drive future thefts.
Financial data, transaction records, and payment details are all highly sensitive, and in the wrong hands can be fodder for spearphishing attacks against wealthy individuals. Malicious threat actors can use that information for identity theft, fraud, and extortion.
The reputational and legal issues facing financial services companies following a breach can be both profound and severe. Breaches damage customer trust and lead to regulatory bodies imposing onerous fines and penalties if the institution is found to be non-compliant with the myriad of regulations they are required to adhere to. In an industry where trust is a fundamental pillar of the customer relationship, failures in this area can do irreparable damage to a company’s reputation.
Complex Regulatory Landscape
Nearly every country has implemented a set of regulations to manage and secure financial services within their borders. These regulations vary between countries, but developed countries and most emerging markets have comprehensive frameworks covering consumer protections, anti-money laundering (AML) rules, and counter-terror financing laws.
The European Union’s (EU) General Data Protection Regulation (GDPR) is a prime example of data protection legislation. Financial services institutions that violate GDPR protections are subject to fines in the hundreds of millions of euros.
Maintaining compliance with these regulations is tricky. Application configurations are not aligned with regulations, and ensuring compliance requires an understanding of both the regulation and the security implications of each setting. To make it more challenging, configurations often drift as admins change settings without recognizing the regulatory implications of their actions.
Interconnected Systems and Third-Party Dependencies
Interconnected SaaS applications offer operational efficiencies and flexibility, but increase the risk of a data breach within a financial service company’s infrastructure. Each additional connection to a third-party vendor increases the attack surface, making them more vulnerable to breaches.
When systems like CRMs, ERPs, and data analytics are compromised, it can provide a gateway into the company’s internal systems, leading to worse breaches and incidents. This risk is amplified by the multiple SaaS applications being managed, each with its own unique security protocols.
Supply chain attacks within the SaaS environment expose these companies to another attack vector. Malicious applications coming from trusted sources exploit the relationship between the financial institution and its vendors, and can lead to widespread data breaches. Security teams must be able to detect when a trusted third-party application begin acting abnormally, which indicates it has been compromised.
Insider Threats
There are two types of insider threats that financial services companies need to be aware of. Malicious insiders are authorized employees or contractors who abuse their access for personal gain, sabotage, or to aid external attackers. In a financial services environment, where employees have access to highly sensitive information, the potential for damage is immense. A malicious employee could steal funds, manipulate financial records, or sell sensitive data to cybercriminals.
Negligent insiders, on the other hand, unintentionally cause harm to their company. Employees might click on phishing emails, go around security protocols, or mishandle sensitive data. This unfortunate incompetence can lead to data breaches, unauthorized access, and the exposure of confidential information.
Monitoring the Full SaaS Stack
These challenges require a dedicated SaaS security solution. SaaS Security Posture Management (SSPM) was conceived and designed to handle the biggest security issues facing SaaS applications.
SSPMs continuously monitor application settings, ensuring that they retain the necessary level of security and alerting application owners and security teams with configurations drift, leaving the application open to a breach.
SSPMs simplify compliance management, associating application configurations with compliance standards from multiple regulatory agencies and industry associations. When a SaaS application’s compliance levels change, SSPM makes it easy for auditors to understand, prioritize, and mitigate the issue.
Security teams also use SSPM to protect themselves from supply chain attacks. SSPMs analyze permission scope requested by applications, perform background checks on the developer, and monitor behavior changes from baseline activities.
SaaS Identity Threat Detection & Response (ITDR) complements the prevention capabilities of SSPM with its ability to detect threats emanating from users, including insider threats. It monitors human and non-human identity (NHI) user behavior, detecting anomalies and mitigating issues stemming from user activities.
For financial services companies, SaaS security breaches can threaten business continuity. Implementing a SSPM and ITDR solution to monitor their SaaS stack and detect threats is essential. Understanding these risks and the role the SaaS security platform plays in mitigating them is key to protecting assets, maintaining compliance, and ensuring customer trust.
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