How Can You Mitigate Cyber Security Risk in the Financial Sector?

The financial sector is one of the most critical components of the global economy. It is an industry that manages vast amounts of sensitive data, high-value transactions, and customer trust on a daily basis. Unfortunately, this significance also makes it one of the most attractive targets for cybercriminals. The stakes are enormous, a single breach can cost millions in fines, disrupt services, compromise sensitive data, and severely damage an organisation’s reputation. Cyber security is more than an operational challenge, it is a cornerstone of business resilience.

This blog explores the evolving threat landscape, the regulatory frameworks shaping cyber security in the financial sector, and actionable strategies to protect organisations from cyber threats in 2025 and beyond.

The Current State of Cyber Security in the Financial Sector.

Regulatory Frameworks Governing Cyber Security in the UK.

The UK has implemented stringent regulations to address growing cyber threats and ensure financial institutions prioritise security. Organisations must navigate these frameworks to remain compliant and build resilience.

Key UK Regulations for Cyber Security in the Financial Sector:

Failure to comply with these frameworks not only invites regulatory penalties but also undermines customer trust. In an industry built on reputation customer trust is essential.

Actionable Strategies to Mitigate Cyber Security Risks.

While regulatory compliance lays the foundation, proactive strategies are essential to staying ahead of increasingly sophisticated threats. Here are six key strategies to mitigate cyber risks in the financial sector:

1. Adopt a Multi-Layered Security Approach

A multi-layered security strategy, or “defence-in-depth,” provides comprehensive protection by addressing threats at multiple points across your infrastructure. This approach ensures that even if one layer is compromised, others remain to mitigate the risk. Key components include:

  • Network Protection: Deploy advanced solutions like next-generation firewalls (NGFWs) to block unauthorised traffic and intrusion detection/prevention systems (IDPS) to identify and neutralise threats in real time. Network segmentation and zero-trust network access (ZTNA) add additional layers of defence by restricting lateral movement.
  • Endpoint Security: Protect devices with endpoint detection and response (EDR) solutions, which use advanced analytics and behavioural monitoring to detect, isolate, and remediate malware and other endpoint-based threats. Consider augmenting EDR with extended detection and response (XDR) platforms for greater visibility across multiple security layers.
  • Threat Intelligence: Leverage real-time threat intelligence platforms to stay ahead of evolving risks. These systems aggregate and analyse global threat data, enabling you to anticipate emerging attack trends, identify vulnerabilities, and proactively strengthen defences. Integrating threat intelligence with your security information and event management (SIEM) platform enhances your ability to respond to incidents swiftly.

By layering these defences, organisations create a resilient security posture. A posture that not only protects against known threats but also adapts to emerging risks, safeguarding critical systems and data.

2. Strengthen Employee Awareness and Training

Human error continues to be a significant factor in successful cyberattacks. As a result, making employee awareness and training a cornerstone of any cyber security strategy. Regular, targeted training empowers employees to:

  • Recognise Threats: Identify phishing attempts, social engineering tactics, and other forms of cyber deception. Training should include real-world examples and guidance on how to respond effectively.
  • Practice Strong Credential Security: Follow best practices for creating secure passwords, safely storing credentials, and using multi-factor authentication (MFA) to strengthen account protection.
  • Handle Sensitive Data Responsibly: Understand data protection policies, avoid sharing sensitive customer or corporate information inappropriately, and comply with regulatory requirements such as GDPR.

Organisations should also incorporate simulation exercises, such as phishing campaigns, to test employee readiness. These exercises provide valuable insights into areas needing improvement while reinforcing best practices. Post-exercise reviews can highlight trends and inform future training efforts.

By equipping employees with the knowledge and tools to act as a first line of defence, organisations significantly reduce their vulnerability to cyber threats.

3. Conduct Regular Cyber Risk Assessments

Regular cyber risk assessments are critical for identifying vulnerabilities, understanding potential threats, and prioritising remediation efforts. These assessments provide a clear view of your organisation’s risk landscape and help ensure defences remain robust against evolving threats. Key focus areas include:

  • Legacy Systems: Evaluate exposure points in outdated or unsupported systems, which are often targeted due to their lack of modern security features. Consider patching, isolating, or replacing these systems to reduce risk.
  • Cloud Security Configurations: Assess cloud environments for misconfigurations, such as excessive permissions, unencrypted data, or poorly defined access controls. Leverage automated tools to scan and address gaps in your cloud infrastructure.
  • Vendor and Partner Systems: Examine the security practices of third-party vendors and partners to identify potential vulnerabilities within the supply chain. Establish stringent security requirements and conduct regular audits to ensure compliance.

In addition to these areas, organisations should incorporate threat modelling and penetration testing to simulate real-world attack scenarios. These proactive measures uncover hidden risks, allowing teams to address issues before attackers exploit them.

By making cyber risk assessments a routine part of your security strategy, your organisation can adapt to emerging risks and strengthen its overall resilience.

4. Develop and Test Incident Response Plans

No defence is infallible. That is why a robust and actionable incident response plan (IRP) critical for minimising the impact of cyber incidents. An effective IRP should:

  • Define Roles and Responsibilities: Clearly outline the responsibilities of key team members, including IT, legal, communications, and executive leadership. Ensure everyone understands their role in mitigating and resolving incidents.
  • Establish Communication Protocols: Develop a comprehensive communication strategy that includes notifying internal stakeholders, external partners, regulators, and affected customers. Ensure messaging is clear, timely, and compliant with any legal or regulatory requirements.
  • Incorporate Regular Testing: Conduct tabletop exercises and full-scale simulations to validate the plan’s effectiveness and identify areas for improvement. Testing should mimic real-world scenarios to prepare teams for the pressures of an actual incident.

In addition to these components, the IRP should include processes for evidence preservation, post-incident analysis, and lessons learned. Continuous refinement of the plan based on evolving threats and past incidents ensures that your organisation is always prepared to respond effectively.

By developing and rigorously testing incident response plans, organisations can reduce downtime, minimise reputational damage, and improve their ability to recover from cyberattacks.

5. Strengthen Third-Party Security

Third-party partnerships are essential for financial institutions but can significantly expand the attack surface. Strengthening third-party security is crucial to mitigating risks introduced by vendors and partners. Key measures include:

  • Due Diligence: Conduct thorough assessments of vendors’ cyber security practices during onboarding. This includes evaluating their compliance with industry standards, reviewing recent audits or certifications, and assessing their ability to detect and respond to threats.
  • Contracts and Service Level Agreements (SLAs): Clearly define security requirements and responsibilities in contracts and SLAs. Include provisions for data protection, breach notification timelines, and adherence to regulatory obligations. Periodically review agreements to ensure they remain aligned with evolving threats.
  • Continuous Monitoring: Use specialised tools to monitor third-party access, activities, and potential vulnerabilities in real time. Implement restrictions on access privileges, enforce the principle of least privilege, and regularly audit vendor connections for unusual activity.

In addition, encourage collaboration with vendors to ensure they maintain robust security measures, such as regular penetration testing and employee training. By prioritising third-party security, financial institutions can protect sensitive data and maintain trust while mitigating risks across their supply chain.

6. Leverage AI and Automation

Artificial intelligence (AI) and machine learning (ML) are transforming cyber security by providing faster, more intelligent defences against evolving threats. Organisations can leverage these technologies to:

  • Detect Anomalies in Real Time: AI-powered systems monitor network traffic and user behaviour, identifying unusual patterns or deviations that could indicate cyber threats. These systems enable rapid detection and response, reducing the time attackers have to exploit vulnerabilities.
  • Automate Patch Management: Automation tools streamline the process of identifying and applying security patches across systems, ensuring vulnerabilities are addressed quickly and consistently. This reduces the risk of exploitation from known threats, particularly in large or complex IT environments.
  • Predict Potential Attack Vectors: ML algorithms analyse historical threat data to identify patterns and anticipate likely attack methods. By forecasting potential risks, organisations can proactively strengthen defences and allocate resources to the most critical areas.

AI and automation also enhance scalability, enabling organisations to handle large volumes of data and security events without overwhelming their teams. By integrating these technologies into their cyber security frameworks, organisations can stay ahead of attackers and improve operational efficiency. This in turn strengthens their overall resilience.

The Role of Leadership in Mitigating Cyber Risks.

Effectively mitigating cyber risks requires more than technical measures. It demands strong leadership and a commitment to embedding cyber security into the organisation’s core values. Leadership plays a pivotal role in driving a proactive and resilient cyber security posture by focusing on:

For organisational leaders, cyber security is not a cost centre. It is an investment in customer trust, operational resilience, and business continuity. By taking ownership of cyber security at the highest levels, leadership ensures that the organisation is well-equipped to face current and future challenges. Strong communication is essential for cyber security leaders.

Conclusion

In the high-stakes world of finance, cyber security is not just a technical requirement, it is a critical business priority. The financial and reputational consequences of a breach can be devastating, making complacency an unaffordable risk. By adhering to UK regulations and adopting proactive, multi-layered strategies, financial institutions can fortify their defences and achieve operational resilience in an ever-evolving threat landscape.

At Secon, we understand the unique challenges faced by financial organisations. From robust risk management to fostering a culture of security, we partner with you to ensure long-term resilience and trust.