Mitigating Third-Party Cybersecurity Risks in Banking

The banking industry is increasingly reliant on third-party vendors for various services, from customer data management to software development. While these partnerships are critical for operational efficiency, they also introduce significant cybersecurity risk. To protect sensitive customer data and ensure regulatory compliance, banking security teams must adopt proactive measures to mitigate third-party risk. 

Third-Party Risks in the News 

Recent incidents have highlighted the dangers of relying on external vendors: 

• Bank of America and Infosys McCamish Systems Breach (2024) 
  In early 2024, Bank of America suffered a data breach through its third-party provider, Infosys McCamish Systems. This breach exposed sensitive customer data, including Social Security numbers, affecting over 57,000 customers. This incident demonstrated how vulnerabilities in third-party providers can directly impact financial institutions and their customers. 

• MOVEit Supply Chain Attack (2023) 
  The MOVEit attack in 2023 targeted vulnerabilities in file transfer systems widely used by third parties. Many financial institutions were compromised, and sensitive customer data was stolen. This attack emphasized the importance of vetting third-party integrations and ensuring any vulnerabilities are patched and continuously secured. 

Best Practices to Mitigate Third-Party Risks 

1. Conduct Comprehensive Vendor Assessments 
Perform thorough due diligence on all third-party providers before onboarding. Assess their security policies, incident response protocols, and regulatory compliance to ensure alignment with your institution’s standards. 

2. Implement Robust Contracts and SLAs 
Clearly define security expectations in contracts. Include clauses for regular audits, breach notification timelines, and penalties for non-compliance with security standards. 

3. Monitor Vendor Activity Proactively  
Use a defense-in-depth strategy to implement layers of cybersecurity defense as a proactive protection against malware infiltrating a bank through a third-party vendor. Regularly review access logs and enforce the principle of least privilege for third-party accounts. 

4. Require Regular Security Audits and Certifications 
Mandate periodic security audits and insist on compliance certifications such as ISO 27001 or SOC 2 for critical vendors. 

5. Enhance Incident Response Plans 
Incorporate third-party breach scenarios into your incident response plans. Conduct tabletop exercises to ensure readiness for vendor-related incidents.

The CodeHunter Solution  

CodeHunter’s malware analysis platform provides comprehensive threat visibility through a patented combination of static, dynamic, and AI malware analysis. CodeHunter’s automated malware analysis delivers actionable intelligence in minutes to empower security teams to respond to emerging threats quickly. CodeHunter integrates into existing security solutions and workflows for proactive layer of Defense-in-Depth protection.  By implementing robust risk management strategies, security teams can better safeguard their institutions and customers. Taking these steps is not just a regulatory requirement but a critical component of trust and resilience in today’s interconnected financial ecosystem. Discover how CodeHunter can supercharge your existing cybersecurity technology stack and boost your security team’s ability to quickly respond to threats here.