2025 Threat Detection for Financial Institutions: Staying Ahead of Rising Cyber Attacks

Cybercriminals have turned the banking industry and financial institutions into their prime targets and data breaches and financial losses are getting more severe.

Let's take a look at some of the biggest incidents in recent years to know just how vulnerable the sector is. In 2019, a vulnerability in First American Financial Corporation exposed 885 million financial and personal records, one of the biggest breaches in the industry.

Over the last two decades, nearly 20% of all reported cyber incidents involved financial institutions and resulted in $12 billion in direct losses. In 2024, ransomware attacks in the financial sector jumped to 65%, almost double from 34% in 2021.

These are just some of the reasons why financial institutions need to step up their cybersecurity and threat detection game.

Why is Threat Detection in Financial Institutions so Important?

Financial institutions are a prime target for cybercriminals because of the tons of sensitive financial data they handle. Protecting customer data is key to maintaining trust, complying with regulations, and preventing identity theft.

Banks and other financial organizations need to defend against various threats including phishing scams that trick employees and customers into sharing confidential information, ransomware attacks that encrypt data and demand payment to release it, insider threats where employees or contractors misuse their access to compromise systems and Advanced Persistent Threats (APTs) where cybercriminals remain undetected inside the network for extended periods and steal valuable data.

The increasing complexity of threats requires financial institutions to adopt proactive cybersecurity strategies.

The Need for Cyber Security for the Banking Industry

Cyber security in banking means utilizing a range of technologies, practices, and processes designed to protect banks' digital systems, data, and networks from cyber threats. This is a critical part of financial services that involves safeguarding sensitive financial data, preventing financial loss, maintaining consumer trust, and ensuring regulatory compliance.

As threats evolve, financial institutions need to stay ahead of emerging threats including APTs and attacks using artificial intelligence (AI) and machine learning (ML). This is why implementing robust cybersecurity measures will help banks effectively protect sensitive financial data and maintain a strong security posture in a digital world.

The Cost of Cyber Threats in Banking

Cyber attacks don't just cause financial loss - they can also erode customer trust, disrupt banking industry operations, and invite regulatory scrutiny.

A cyber attack on third-party vendors can compromise a bank's security and severely impact customer trust and financial stability. The International Monetary Fund reported that financial institutions cyber losses have quadrupled since 2017, reaching $2.5 billion in 2025.

Reputation Damage

Cyber attacks can damage the public perception of a financial institution. A European Central Bank stress test found that many banks are still not prepared to handle and recover from major cyber incidents and risk their reputation.

Operational Disruptions

Attacks like the 2015-2016 SWIFT banking hacks disrupted financial transactions and caused chaos in banking systems. A successful cyberattack can lead to downtime, unauthorized transfers, system malfunctions, and prolonged disruptions to critical operations.

Regulatory and Legal Consequences

Banks that fail to meet cybersecurity standards risk hefty fines, legal action, and increased scrutiny from regulators. As cyber threats evolve, financial authorities continue to impose stricter security requirements to mitigate risks.

Customer Impact

Cyber attacks don't just affect institutions - they impact customers. From fraudulent transactions to stolen identities, these breaches can erode trust, cause financial losses, and leave victims struggling to recover.

Cybersecurity Threats in the Financial Sector

Financial institutions are prime targets for cybercriminals, facing increasingly sophisticated threats that can disrupt operations, compromise sensitive data, and erode customer trust. To stay ahead, banks must implement advanced threat detection, rapid response strategies, and a multi-layered security approach to defend against constantly evolving attacks.

Let's now examine the key cyber threats putting financial institutions at risk:

Zero-day Exploits

Zero-day exploits are a major threat, allowing hackers to target software vulnerabilities before patches are available. Financial institutions often have limited time to respond, making proactive monitoring and rapid patching critical. Attackers use these flaws to bypass security controls, steal data, or disrupt operations.

Ransomware

Ransomware 2.0 takes extortion to another level-attackers don't just encrypt data, they threaten to leak it if demands aren't met. This puts financial institutions in a tough spot, balancing data recovery with reputational damage. Strong backups, endpoint protection, and rapid incident response are key to reducing the impact of ransomware.

Supply Chain Threats

Supply chain attacks exploit weaknesses in third-party vendors to infiltrate financial institutions. A single compromised supplier can give attackers access to sensitive systems and data. Vetting vendors, enforcing strict security requirements, and continuous monitoring help mitigate these risks.

Phishing Attacks

Phishing is one of the most common cyber threats to financial institutions. Attackers impersonate trusted sources via email, phone calls, or text messages to steal login credentials and financial data.

The best defense is awareness. Training employees to spot and report phishing attempts reduces risk. Email filters help block malicious messages before they reach inboxes, and multi-factor authentication (MFA) makes unauthorized access much harder, even if passwords are compromised.

Financial institutions also need a clear incident response plan to quickly identify, contain, and mitigate phishing threats while keeping employees, customers, and regulators informed.

Social Engineering Attacks

Social engineering goes beyond phishing, exploiting trust and urgency to manipulate employees into revealing sensitive information or granting access. Attackers may pose as colleagues, IT staff, or executives to bypass security controls.

Preventing these attacks starts with strong security awareness. Employees should verify unexpected requests, question urgent demands, and follow established verification steps. Strict access controls and dual approvals for high-risk actions add another layer of protection.

Behavioral analytics can help detect suspicious activity, and a solid response plan ensures quick action when an attack happens. Building a culture of security awareness is the best defense against social engineering.

Insider Threats

Insider threats come from within the organization, employees, contractors, or other individuals with authorized access to the institution's systems and data. These can be intentional or accidental but both are serious risks to the security of sensitive financial data.

To mitigate insider threats, financial services organizations focus on strict access control, continuous monitoring, and comprehensive training programs.

API Vulnerabilities

API vulnerabilities occur when Application Programming Interfaces (APIs) are not properly secured and attackers can exploit these weaknesses.

To address API vulnerabilities, financial institutions implement secure coding practices, regular security testing, and API security gateways to prevent unauthorized access and data breaches.

10 Tips for Strengthening Cyber Threat Detection in Banks

Banks are constantly targeted by cyber threats, making a multi-layered security approach essential. Continuous monitoring, endpoint protection, and network segmentation help detect and contain attacks, while behavioral analytics spot anomalies before they turn into serious breaches. Regular security audits and proactive threat hunting add another layer of defense.

But staying ahead of evolving threats takes more than just strong defenses-it requires a proactive, intelligence-driven strategy. Here are 10 key cybersecurity measures financial institutions need to stay secure:

Using a Threat Hunting Platform

Traditional security tools often miss sophisticated threats, making proactive threat hunting essential for financial institutions.

A threat hunting platform helps security teams identify hidden threats by continuously scanning for Indicators of Compromise (IOCs) and tracking attacker infrastructure in real time. By analyzing behavioral patterns and historical data, banks can catch evolving threats before they escalate.

With automated correlation and deep threat intelligence, these platforms reduce dwell time and improve early detection. Financial institutions can strengthen their defenses by integrating proactive hunting platforms alongside existing security measures, staying ahead of cybercriminals before an attack unfolds.

Data Encryption and Access Control

Data encryption and access control are the foundation of cybersecurity in banking. Data encryption ensures even if cybercriminals intercept sensitive data, they can't read or use it without the decryption key. Financial institutions must use different encryption methods including end-to-end encryption to protect sensitive financial data during transmission and storage.

Access control is equally important to ensure that only authorized individuals can access sensitive data and systems. MFA, IAM, and role-based access control are the strategies used by financial institutions to enforce strict access controls. Combining data encryption with robust access control, helps banks to fortify their security and protect sensitive financial data from unauthorized access.

Data Activity Monitoring

Data activity monitoring and anomaly detection are key components of robust cybersecurity for financial institutions. This measure involves monitoring financial systems for suspicious activity and detecting anomalies that may indicate a cyber attack.

Implementing data loss prevention (DLP) systems is a must in monitoring and controlling sensitive data. DLP systems can track data movement and usage, ensuring sensitive information is not accessed or transferred inappropriately.

Machine learning algorithms can also be used to detect anomalies in financial systems. These algorithms analyze patterns and behaviors, flagging any deviation that may signify a potential cyber threat.

Anomaly Detection

Having a comprehensive incident response plan is also important. This plan should include procedures to respond to detected anomalies, contain the threat, and mitigate any damage. Regularly reviewing and updating security policies ensures they remain effective in detecting and preventing cyber-attacks.

By including data activity monitoring and anomaly detection in their cybersecurity, financial institutions can improve their ability to detect and respond to threats and protect their sensitive financial data.

Incident Response Planning

Incident response planning is critical for financial institutions to respond quickly and effectively to cyber attacks. A well-defined incident response plan ensures organizations can contain and mitigate threats, minimize damage, and restore normal operations as soon as possible.

It should start with the identification of incident response team members and their roles, this team should include representatives from various departments such as IT, legal, communications, and management to ensure a coordinated response.

The plan should outline clear procedures to contain and eradicate the threat. This includes steps to isolate affected systems, remove malicious software, and restore data from backups.

Communication strategies are also a critical part of it; the plan should detail how to inform stakeholders including employees, customers, and regulators about the incident and the steps being taken to address it.

Post-incident activities are also important. After an incident, the response team should conduct a thorough review to understand what happened, how it was handled, and what can be improved. Updating security policies and procedures based on lessons learned ensures the organization is better prepared for future incidents.

By having a comprehensive incident response plan, financial institutions can strengthen their security and be ready to handle cyber attacks and protect their sensitive financial data.

MFA and IAM

MFA and IAM are important components of banking cybersecurity. MFA adds an extra layer of security beyond just passwords, requiring users to verify their identity through other means such as biometrics, one-time passcodes, or security tokens.

IAM is a framework that manages electronic identities and ensures the right individuals have access to the right resources at the right time for the right reasons. Using MFA and IAM allows financial institutions to tighten their security, protect sensitive financial data, and ensure access to critical systems is controlled and monitored.

Compliance & Regulations

Cybersecurity in banking is also regulated. Institutions must comply with various security and data protection standards including GDPR for personal data security, PCI DSS for payment transaction security, and BSA/AML Compliance for anti-money laundering through banking systems.

Beyond fines, compliance ensures financial institutions maintain the trust of regulators, stakeholders, and customers.

Managed Detection and Response (MDR)

Many financial institutions are turning to Managed Detection and Response (MDR) services to strengthen their cybersecurity. These services provide continuous monitoring and rapid threat response, helping institutions detect and neutralize threats before they cause significant damage.

Outsourcing MDR enables banks to comply with regulatory requirements, get access to the latest technology, and enhance their threat intelligence without having to maintain a large internal security team.

Threat Intelligence

Threat intelligence is key to predicting and mitigating cyber threats. By analyzing attack patterns and monitoring known threat actors, financial institutions can anticipate risks before they happen.

Financial institutions that integrate threat intelligence with their incident response framework can minimize the impact of cyber-attacks and strengthen their overall security.

While these security measures help strengthen a bank's defenses, they're not enough to stay ahead of sophisticated cyber threats. This is where advanced threat detection platforms come in-offering real-time intelligence, proactive hunting, and deeper visibility into emerging risks.

The Role of Advanced Threat Detection Platforms in Financial Cybersecurity

Financial institutions deal with a constant flow of cyber threats, from phishing scams to sophisticated ransomware campaigns. Traditional security tools, like firewalls and SIEMs, help detect known threats, but they often fall short when it comes to identifying new and evolving attack tactics. Threat detection platforms fill this gap by providing real-time visibility into potential threats before they escalate into serious incidents.

One of the biggest advantages of these platforms is early warning detection. Cybercriminals frequently rotate their infrastructure, using new domains, IPs, and attack methods to stay ahead of security teams. A robust threat detection platform continuously scans for indicators of compromise (IOCs), malicious infrastructure, and unusual behavior to help security teams act before an attack unfolds.

Another key benefit is threat intelligence enrichment. Instead of just flagging suspicious activity, these platforms provide context---linking threats to known adversaries, malware families, and historical attack patterns. This makes investigations faster and reduces alert fatigue, helping security teams focus on real threats rather than chasing false positives.

Threat detection platforms also support proactive hunting by allowing analysts to search for hidden threats within their networks. Rather than waiting for alerts, security teams can query historical attack data (like SSL/TLS history), analyze anomalies, and uncover previously undetected threats. This approach is crucial in combating stealthy attacks like Advanced Persistent Threats (APTs), which often linger in financial networks for months.

For financial institutions facing increasing regulatory scrutiny, these platforms also play a vital role in compliance and reporting. Many regulations require continuous monitoring and documentation of security incidents. A strong threat detection platform automates reporting, provides audit trails, and ensures institutions can demonstrate compliance with evolving cybersecurity standards.

Hunt.io: Proactive Threat Hunting for Financial Institutions

Hunt.io's Threat Hunting Platform empowers financial institutions with real-time intelligence and proactive defense against cyber threats. With active C2 detection, advanced threat enrichment, and high-fidelity IP scanning, Hunt.io gives security teams the visibility they need to detect emerging threats before they escalate.

Our HuntSQL™ query engine allows analysts to search historical malware, phishing, and attack infrastructure data, exposing hidden patterns that traditional tools miss. By integrating seamlessly with SIEMs and existing security workflows, Hunt.io helps financial institutions reduce risk, strengthen incident response, and stay ahead of evolving cyber threats.

Real-Life Threat Detection for Financial Institutions

Threat actors continuously evolve their tactics to bypass traditional security defenses, targeting financial institutions with banking trojans, malware, and phishing infrastructure.

Hunt.io's Threat Hunting Platform helps uncover hidden threats, track malicious infrastructure, and prevent attacks before they escalate. Here are real-world examples where our security researchers detected threats targeting the financial sector.

Coyote Banking Trojan: Abusing SSL Mutual Authentication

The Coyote banking trojan is a stealthy, multi-stage malware targeting financial institutions in Brazil. Unlike typical banking trojans, Coyote employs SSL mutual authentication, ensuring only specific client certificates can communicate with its C2 infrastructure. This tactic makes it difficult for traditional security tools to detect or disrupt its activities.

Using Hunt.io's SSL anomaly detection, our researchers identified certificates signed by unknown authorities that were used to authenticate malware traffic. The domains exhibited suspicious patterns, including the use of misleading names like "EASport Games" to blend in with legitimate traffic. By filtering for flags.unknown_authority in HuntSQL™, we reduced the dataset from over 33 million generic results to just three highly probable C2 servers linked to an active Coyote campaign.

SmokeLoader Malware Found in Open Directories Targeting Ukraine's Banking Sector

SmokeLoader is a versatile malware loader frequently used by cybercriminals and suspected Russian threat actors to deploy secondary payloads such as credential stealers and remote access trojans (RATs).

In a recent campaign, Hunt.io researchers identified open directories hosting SmokeLoader samples, along with financial-themed lure documents impersonating major Ukrainian banks.

Our investigation discovered two misconfigured servers serving as staging points for SmokeLoader distribution. The directories contained Windows executables disguised as legitimate financial documents, including phishing lures mimicking Raiffeisen Bank and Sense Bank, two of Ukraine's largest financial institutions. By analyzing this infrastructure, Hunt.io traced the malware's command-and-control servers and provided early visibility into the threat actor's operational methods.

As you can see, Hunt.io's proactive threat hunting capabilities help financial institutions stay ahead of cybercriminals, reduce attack surfaces, and protect customer financial data from advanced threats.

Final thoughts

Cyber threats are constantly evolving, and financial institutions must adopt proactive threat detection to protect data and customer trust. By investing in advanced security solutions, complying with regulatory requirements, and educating employees, banks can build a robust cybersecurity framework to stay resilient against emerging threats. See how Hunt.io can help-book a demo today.