In the financial sector, IT security is not an add-on – it is a critical component of operational stability, regulatory compliance, and maintaining the trust of clients and partners. Every vulnerability, every oversight can lead not only to financial loss, but also to reputational damage and legal consequences. Financial institutions are among the most frequent targets of cyberattacks, due to the high value of the assets they manage – including money, personal data, and transactional systems.
Despite growing regulatory pressure (GDPR, DORA, NIS2) and broader access to advanced security technologies, many organizations still repeat the same common mistakes. These issues rarely stem from a lack of technical expertise or insufficient resources – more often, they result from lax procedures, poor organizational decisions, or outdated operational practices.
Such mistakes pave the way for data leaks, ransomware infections, privilege escalation, or an inability to effectively respond to security incidents. In reality, the most serious threats often don’t come from sophisticated hacking techniques – but from fundamental failures in security management.
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Security Mistake #1 in Financial Institutions: Lack of Regular Security Testing and IT Audits
In the financial sector, security tests and IT audits are often performed reactively – usually in response to regulatory requirements or after an incident has already occurred. This approach leaves the organization operating in uncertainty regarding the actual state of its security posture. Given the constantly evolving threat landscape and the complexity of modern IT environments, the absence of continuous control measures leads to a situation where the company simply does not know its true level of vulnerability or operational risk.
How Security Failures in Financial Institutions Often Stem from a Lack of Testing
Financial institutions that do not conduct regular security testing operate on assumptions – not facts. Without verifying the actual configuration of systems and security settings, it is impossible to know whether protective measures are truly effective. This lack of visibility often leads to the most costly mistakes – those discovered only when an attack occurs.
Many decision-makers assume that if no incident has happened, everything must be working as expected. Meanwhile, cybercriminals act proactively – scanning infrastructures and looking for the easiest points of entry. These often result from excessive privileges, unpatched vulnerabilities, or misconfigurations – all of which could have been addressed through prior penetration testing or audits.
Security testing is about much more than just detecting vulnerabilities. It also evaluates the effectiveness of internal procedures and the readiness of personnel to respond to threats. In the financial sector, where organizations face strict oversight and high regulatory expectations, skipping tests means ignoring the obligation for continuous improvement in protection levels – as required by frameworks such as DORA or guidelines from national regulators like the Polish FSA (KNF).
Penetration Test vs. Security Audit
Although penetration testing and security audits are often used interchangeably, they serve different functions and address different organizational needs. Penetration tests focus on practical attacks – their goal is to detect technical vulnerabilities and determine whether they can be realistically exploited by an attacker. It is a simulation of a threat in real-world conditions – often conducted without prior notice to operational teams.
On the other hand, a security audit is a comprehensive assessment of compliance with internal policies, standards (e.g., ISO 27001, NIST), and industry regulations. It covers not only technical infrastructure, but also documentation, risk management, incident response processes, and employee awareness.
A penetration test answers the question: “What can be broken into?”
A security audit answers: “Are we operating in line with our established policies?”
In practice, these two activities should complement each other – the test reveals specific vulnerabilities, and the audit explains why they may have occurred and whether they were properly reported and handled. A well-planned security cycle in a financial institution should include both elements – tests as a resilience check, and audits as a verification of process maturity.
Security Mistake #2 in Financial Institutions: Improper User Privilege Management
User privileges in financial institutions must be tightly controlled – they are a cornerstone of effective security. Every system access increases the attack surface and potential risk. Therefore, access should be granted based on clear policies and be regularly reviewed.
Many organizations lack consistent processes for managing access to data and applications. The result is privilege sprawl – users accumulating excessive permissions over time, often retaining access even after changing roles or leaving the company. These oversights can lead to compliance violations and breaches of security standards.
How Security Failures in Financial Institutions Arise from Uncontrolled Privileges
Poorly structured access management is one of the main causes of serious incidents in the financial sector. Employees often retain access to systems and data that exceed their current responsibilities – especially after departmental changes, promotions, or project completion. The lack of automation and periodic access reviews results in the uncontrolled growth of privileged accounts, significantly increasing the attack surface.
Importantly, attackers don’t need to bypass advanced defenses – all they need is a compromised account with excessive privileges to gain access to sensitive data or transactional systems. This type of mismanagement is one of the most common drivers of threat escalation in financial institutions, even when the initial breach appeared minor.
Security Failures in Financial Institutions and the Lack of Access Control
The lack of periodic access reviews is one of the most underestimated security mistakes in financial institutions. In practice, this means that employees often retain access to systems, applications, or data for months – or even years – after they no longer need it.
Such oversights lead to the accumulation of unnecessary privileges, increasing the risk of misuse and making privilege escalation easier in the event of an attack. From a compliance standpoint, failure to control access violates GDPR, the EU DORA regulation, and ISO 27001 standards, all of which require access to sensitive data to be documented, reviewed, and restricted.
Regular access reviews, combined with approval and deprovisioning workflows, are essential for maintaining strong cybersecurity and minimizing internal vulnerabilities that could be exploited in the future.
Security Mistake #3 in Financial Institutions: No Incident Response (IR) Plan
The absence of a formal Incident Response (IR) plan leaves an organization operating in chaos at the worst possible moment – during a data breach, ransomware attack, or information leak. In practice, this means no one knows who makes decisions, how quickly to escalate the issue, when to notify customers, or when to alert regulators. Such disorganization in a financial institution results in escalating losses, loss of control, and delays in recovery efforts.
The core issue is not the lack of technology – it’s the lack of preparedness when that technology fails. This failure often reveals organizational immaturity and is one of the most common security mistakes in financial institutions.
Security Failures in Financial Institutions and the Consequences of Not Having an IR Plan
One of the most serious consequences of not having an Incident Response (IR) plan is the inability to react quickly during a crisis. Without defined procedures, the team loses valuable time trying to determine what to do and who is responsible for what. Meanwhile, the impact of the attack escalates: ransomware encrypts more systems, data leaks onto the Tor network, and customer trust begins to erode.
In the financial sector, such a situation leads not only to operational losses, but also to potential legal and regulatory penalties. Regulations such as DORA, GDPR, or requirements from supervisory bodies like the Polish FSA (KNF) mandate rapid incident reporting. Lack of preparedness can therefore result in fines, reputational damage, and loss of business partners.
It is important to remember that incidents happen even to well-protected organizations. What sets them apart is their readiness to respond. Not having an IR plan is not just a technical oversight – it is a critical management failure that leaves the institution defenseless in the face of real threats.
How to Implement an Effective Incident Response (IR) Plan
An effective IR plan is not a document kept in a drawer – it’s a practical action scenario that should be known and tested by all key personnel within the organization.
It should include:
Clearly defined roles and responsibilities – who makes decisions, who informs customers, who communicates with regulators
Step-by-step procedures – from incident identification to analysis and reporting
Escalation processes – when and to whom the incident should be escalated within management
Communication protocols – both internal (e.g., IT teams, executives) and external (customers, media, financial authorities, data protection regulators)
A testing schedule – tabletop exercises that simulate incidents in a controlled environment to validate and refine the plan
Security Mistake #4 in Financial Institutions: Outdated Systems and Production Applications
In financial institutions, access to customer data, transaction records, account information, and internal systems should be restricted strictly to employees who genuinely need it for their daily tasks. In practice, however, it's common to find broad access across departments, allowing users to view or export data well beyond their responsibilities.
This results in what is known as “flat access” – where many users can reach information outside their functional scope. Combined with a lack of data segmentation and access path controls, this creates environmental chaos, making it much easier for attackers to succeed or for insiders to misuse information.
Excessive privileges are a critical security mistake in financial institutions, as they provide cybercriminals with broad opportunities once a single account is compromised. In real terms, this can mean escalated access to sensitive customer data, transaction details, or even to payment systems and backup environments.
A lack of segmentation means there are no technical boundaries between data zones and systems, which enables lateral movement by an attacker once initial access has been gained.
How Data Segmentation Helps Prevent Security Failures in Financial Institutions
Data and network segmentation is one of the most effective ways to minimize damage after unauthorized access has been gained. By dividing resources into isolated zones with restricted communication paths, an organization can effectively stop an intruder early in the attack chain. Even if a single account or device is compromised, segmentation prevents lateral movement and limits privilege escalation.
Well-designed segmentation should be supported by access control policies (e.g., RBAC) and activity monitoring. This combination helps reduce the risk of security failures in financial institutions and forms a critical foundation for compliance with industry regulations.
Security Mistake #5 in Financial Institutions: Excessive Access to Sensitive Data
Every security gap can have serious consequences. Yet many organizations still delay updates to operating systems, business applications, and network devices. This is often due to concerns about downtime, complex infrastructure, or a lack of proper testing procedures.
Failing to apply updates is one of the most obvious – and most dangerous – security mistakes in financial institutions. Cybercriminals actively scan networks for vulnerable software versions, exploiting known flaws to compromise systems, deploy malware, or steal data.
Unpatched systems are like open doors – anyone familiar with the right attack vector can walk through them. Even the most advanced enterprise-grade solutions become ineffective if they are not regularly updated and tested after patch deployment.
Why Updates Are Critical for the Security
of Financial Institutions
Implementing a patch management policy should be a fundamental part of any cybersecurity strategy. Financial institutions are particularly exposed to zero-day attacks, ransomware campaigns, and the exploitation of vulnerabilities in third-party components.
Therefore, every update should be:
Tested in a staging environment
Approved according to established procedures
Monitored for effectiveness and potential side effects
Deployed within defined timeframes (e.g., within 14 days of a critical patch release)
Consistent updating of the IT environment reduces the attack surface, improves compliance with ISO standards and regulations such as DORA and NIS2, and strengthens the organization’s resilience against increasingly sophisticated threats.
Security Mistake #6 in Financial Institutions: Lack of Training and Low Employee Awareness
Not all threats come from outside. Sometimes it’s employees – unintentionally or due to lack of knowledge – who pose the greatest risk to the organization. Clicking on a malicious attachment, sharing confidential data, or failing to report suspicious activity are just a few examples of human errors that can lead to serious incidents.
The absence of cybersecurity training is a critical security mistake in financial institutions. This sector handles sensitive data and systems essential to the economy, which means that even basic carelessness can result in significant security breaches.
Why Employee Education Matters for Organizational Security
Regular training, social engineering tests (e.g., phishing simulations), and internal awareness campaigns help build a strong security culture. An employee who understands threats, knows how to respond, and where to report incidents becomes the organization’s first line of defense.
Education should cover not only IT staff, but all departments – from accounting to executive leadership. Only then can the organization realistically reduce the risk of errors caused by ignorance or routine behavior.
Security Mistake #7 in Financial Institutions: Lack of Monitoring and Event Analysis
Cybersecurity doesn’t end with firewalls and antivirus solutions. Real protection begins when an organization can detect suspicious activity and respond before damage occurs. Unfortunately, many financial institutions lack effective real-time event monitoring, or limit themselves to passive log collection.
The absence of systematic monitoring is a critical security mistake in financial institutions, leading to delayed incident detection, lack of audit trails, and greater difficulty in post-incident analysis.
Why Monitoring and Incident Analysis Are So Important
SIEM, EDR, and NDR systems do more than just log events – they enable correlation, analysis, and anomaly detection. Rapid identification of suspicious patterns (e.g., unusual login behavior, large data transfers, configuration changes) is what allows organizations to interrupt an attack before it reaches its objective.
Implementing effective monitoring is not only a technical matter – it also requires well-defined policies, proper resourcing, and analytical expertise. Organizations that fail to do so are effectively blind to what’s happening within their IT environment.
