The High Cost of Cyberattacks for Banks: Risk and Solutions

Cyberattacks are hitting the banking sector harder than ever-both financial and reputational. From ransomware payments and regulatory fines to shaken customer trust, the impact is far-reaching. This post breaks down the real costs banks face and how they can strengthen their defenses.

Key Facts

• Each ransomware attack costs banks an average of $6.08 million, not including increased cybersecurity spending and regulatory fines.

• Cyberattacks cause major downtime, and damage to reputation and customer trust, which can even affect stock prices.

• The increasing frequency and complexity of attacks specifically targeting the banking and financial sectors mean advanced cybersecurity is urgently needed to counter new threats.

Proactive cybersecurity like threat detection and threat hunting is key to reducing risk and protecting financial data.

The True Cost of Cyberattacks on Financial Institutions

Cyberattacks aren't just a technical problem-they're a massive financial drain and a big source of cyber risk. In 2024, the average data breach cost was $6.08 million, a 10% increase from the previous year, which had around 3.348 attacks worldwide. The systemic impact of these cyber threats is a big risk to the financial system.

These costs add up in many ways:

• Direct financial loss from fraud and system recovery

• Increased spending on cybersecurity to prevent future attacks

• Revenue loss from downtime and customer churn

The increase in ransomware attacks means banks are investing even more in cybersecurity, stretching budgets and pulling funds away from other priorities.

"Cyberattacks are now the foremost risk to the global financial system, even more so than the lending and liquidity risks that led to the 2008 financial crisis," says Jerome Powell, Chair of the Federal Reserve.

Regulatory Fines Are The Kick In The Teeth

Beyond the direct costs, banks also face big fines if they don't meet strict cybersecurity standards. The financial sector is a prime target, with each data breach costing an average of $6.08 million. Compliance isn't just about avoiding fines-it's about financial stability. In the US, financial institutions must report cyber incidents within 36 hours. Failing to do so can mean big fines and legal consequences.

Cybersecurity Is No Longer Optional

Banks must treat cybersecurity as a core part of their business strategy, especially in the financial services sector, which is so vulnerable to cyber threats. As threats evolve, not acting now will cost far more later.

Downtime and Reputational Damage

Cyberattacks don't just steal money-they bring entire banking systems to a standstill. Advanced persistent threats pose unique challenges to operational resilience, threatening the confidentiality and integrity of data, which can result in big financial losses over the short and long term. Transactions get delayed, customer access is blocked, and business as usual comes to a grinding halt.

Cyberattacks Erode Public Trust

Reputational damage can be even more costly than direct financial loss. Customers expect their financial data to be safe, and when that trust is broken, it's hard to rebuild. Some studies revealed that customers whose data was breached were much more likely to cut ties with the bank within six months of the incident. Financial services firms have a key role to play in maintaining cybersecurity to prevent such breaches and protect sensitive customer data.

Stock Prices Take a Hit

Investors also take notice. After a cyberattack, firms in the financial sector experience an average stock price decline of approximately 2.3% within four days, with the decline reaching 4.6% over 60 days.

Why Banks Can't Ignore Cybersecurity

Banks need to go beyond compliance and take a proactive approach to cybersecurity. Meeting regulations is the minimum-protecting customer trust and business operations is just as important.

Data Breaches and Sensitive Info Theft

Data breaches are one of the biggest threats to banks. Each stolen record of sensitive financial data costs $181, making breaches an expensive problem. Financial organizations need to adopt advanced cybersecurity technologies to prevent these costly breaches.

Big Data Breaches in Banking

• Flagstar Bank (June 2022): 1.5 million customers affected, Social Security numbers exposed.

• Capital One (March 2019): 100 million credit card applications hacked, one of the largest financial breaches ever.

• Equity Bank (April 2024): 179 million Ksh were stolen, from 551 customers in Kenya through debit card fraud over seven days.

• Iranian Banks (August 2024): millions of credit cards were affected by an Iranian group named IRLeaks, which attacked 20 out of 29 Iranian banks, including the Central Bank.

The financial services industry is facing more sophisticated cyber threats, making banks and other financial institutions more vulnerable to cyberattacks. On average banks take 258 days to detect and contain a breach. The longer it takes, the worse the damage. Stolen financial data ends up on the dark web and increases the risk of fraud and identity theft.

Ransomware Attacks on Banks

Financial systems are critical to cyber threats, ransomware attacks are a big financial hit for banks. According to Newfront, 42% of financial institutions pay ransom to regain their systems online.

True Cost of Ransomware

• Direct loss: Paying ransoms can cost millions.

• Recovery expenses: External cybersecurity experts are required to decrypt and recover data.

• Reputational damage: Customers and investors lose trust in the affected banks.

Modern ransomware tactics like double and triple extortion mean banks don't just pay once-they're being asked to pay multiple times to prevent data leaks or further disruptions.

How can financial organizations stay protected?

As cybercriminals become more sophisticated, relying on traditional security measures alone is no longer enough.

As cybercriminals get smarter, relying on traditional security alone is no longer enough. To build a strong defense, you need a multi-layered cybersecurity approach with both preventative and proactive measures. Here's what those layers should look like:

1. Security Awareness and Training

Human error is the biggest cause of security breaches. Phishing emails, social engineering, and poor password hygiene can let attackers in. That's why ongoing employee training is key. By educating all staff-from customer service reps to board members-to recognize threats and respond accordingly, banks can reduce the likelihood of a breach.

Regular simulations, training modules, and internal awareness campaigns help build a security culture. The goal is to turn employees into the first line of defense, able to identify suspicious behavior and stop it before it becomes an incident.

2. Identity and Access Management (IAM)

Who has access to what is key to reducing internal risk? A strong IAM program ensures employees only have access to systems and data relevant to their role. This includes multi-factor authentication, strict password policies, and monitoring for unusual account activity.

Banks must also limit privileged access and rotate credentials regularly. IAM is most effective in containing breaches-if one account is compromised, the damage is minimized. In environments where compliance is critical, IAM also provides the audit trails for regulatory reviews.

3. Endpoint and Network Protection

Devices like ATMs, employee laptops, and mobile banking platforms are all endpoints that can be exploited. Implementing endpoint detection and response (EDR) tools, network segmentation, and intrusion detection systems helps banks monitor and protect these entry points.

Along with firewalls and encrypted communication protocols, this layer stops threats from spreading across systems. Endpoint protection also gives visibility into device activity so security teams can act fast when anomalies are detected.

4. Data Encryption and Backup Strategy

Even if attackers get into sensitive data, encryption can make it useless. Banks should encrypt all customer and transaction data both in transit and at rest. Just as important is having a robust backup and recovery plan, especially in the face of ransomware. Versioned and offsite backups allow institutions to recover quickly without paying ransoms. Backups should be tested regularly to ensure business continuity in the event of a major outage.

5. Threat Detection and Threat Hunting

Proactive security measures like threat detection and threat hunting are key to staying ahead of evolving threats.

Why Threat Hunting is Important

• Identifies vulnerabilities before attackers do, addresses systemic cyber risks to financial institutions

• Detects sophisticated threats that traditional security tools miss

• Improves overall cyber resilience and incident response

How Hunt.io Supports Financial Institutions Against Cyber Threats

At Hunt.io, we help security teams proactively identify, analyze, and neutralize emerging cyber threats-before they escalate into full-blown incidents. Our threat hunting platform combines threat hunting with adversary infrastructure mapping, allowing banks to spot attacker behaviors, malware staging areas, and compromised open directories.

We're not just about alerts-we help you track adversary tooling, map command and control infrastructure, and pivot across connected indicators in real-time. That level of visibility is crucial for financial institutions facing advanced threats.

One of our recent investigations uncovered SpyNote, a spyware campaign hiding in open directories and posing as legitimate banking apps-including one mimicking Germany's Postbank. The spyware exploited Android permissions to steal user data, while its infrastructure used dynamic domains and remote access capabilities to maintain persistence. Our analysis helped surface the full network of compromised IPs and C2 domains involved.

Another campaign we documented involved SmokeLoader malware, distributed via exposed servers targeting Ukraine's banking and automotive sectors. The malware was bundled with financial-themed lures like fake invoices from Raiffeisen Bank and Sense Bank. By tracking the malware's behavior, C2 patterns, and staging infrastructure, our team provided early warnings and mapped the full extent of the campaign.

These are just two examples of how we support threat researchers and SOC teams in financial services. By uncovering infrastructure before it's weaponized at scale, Hunt.io helps security teams stay one step ahead of attackers.

Case Studies: Bank Cyberattacks

Real-world cyberattacks on banks reveal the severe financial, operational, and reputational consequences of security failures. These incidents highlight how cybercriminals exploit vulnerabilities in financial systems, targeting digital payment networks, supply chains, and internal security weaknesses to execute large-scale fraud.

One of the most infamous bank cyberattacks, the Bangladesh Bank Heist, exposed critical vulnerabilities in global financial transaction systems. Threat actors infiltrated the bank's network and gained access to the SWIFT (Society for Worldwide Interbank Financial Telecommunication) system, the international network used for bank-to-bank transactions.

By manipulating SWIFT messages, they attempted to steal nearly $1 billion from the Bangladesh Bank's account at the Federal Reserve Bank of New York. While most of the fraudulent transactions were flagged and blocked, $81 million was successfully withdrawn and funneled through casinos in the Philippines, making recovery nearly impossible.

In 2017, Russian financial institutions faced a coordinated cyberattack that led to the theft of over $31 million. Cybercriminals targeted multiple banks using fraudulent card transactions, ATM hacks, and unauthorized transfers. The attackers reportedly gained access to internal banking networks and exploited weaknesses in the banks' fraud detection systems to execute illicit transactions without immediate detection.

These attacks exposed critical vulnerabilities in banking infrastructure, showing how cybercriminals can exploit weaknesses in transaction processing, fraud detection, and internal security controls. Collectively, these incidents reinforce the need for financial institutions to strengthen real-time fraud detection, do proactive threat hunting, improve endpoint security, and enhance transaction monitoring systems to prevent similar breaches.

Final thoughts

Cyberattacks are a big financial hit to banks, eroding trust and stability. Proactive cybersecurity measures like threat detection, threat hunting, and compliance monitoring are the ways to reduce these risks.

Banks must invest in cybersecurity to protect themselves and their customers. Multi-layered cybersecurity isn't just a defensive mechanism-it's a necessity to survive in the digital banking world and to protect the overall integrity and stability of the financial system.

Start enhancing your threat-hunting strategy and leverage attacker tactics to your benefit. Find out how Hunt.io's advanced features can bolster your organization's security. Book your demo today.