# Advancing the financial sector’s cybersecurity with AI 
Author:  Pal Sinha, Barnali 
Author URL: https://financedigest.com/author/pal-sinha-barnali
Published: 2020-05-05
Category: FINANCE
Category URL: https://financedigest.com/category/finance
Meta Title: AI in Financial Services: Combatting Cyberthreats
Meta Description: Explore how AI and machine learning can help financial institutions in the UK secure against cyber threats, from insider attacks to DDoS and phishing attempts.
URL: https://financedigest.com/advancing-the-financial-sectors-cybersecurity-with-aihtml

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_By **Sareeka A. G.,** Product Consultant at_ [_ManageEngine_](https://eur03.safelinks.protection.outlook.com/?url=http%3A%2F%2Fmanageengine.co.uk%2F&data=02%7C01%7CAmberC%40whiteoaks.co.uk%7Cc6ce798c284e48c7bf7308d7f0102152%7C7a109dbbbc1e4db2a56e6e23bef17d6f%7C0%7C0%7C637241824400495866&sdata=VcSaPMfJRiWGTlS0TIWCnkSrQtYyPsOVJUNLcmNRX0w%3D&reserved=0)

The United Kingdom has the sixth-largest economy in the world, and in 2018, the financial services industry contributed a massive [£132 billion](https://eur03.safelinks.protection.outlook.com/?url=https%3A%2F%2Fcommonslibrary.parliament.uk%2Fresearch-briefings%2Fsn06193%2F&data=02%7C01%7CAmberC%40whiteoaks.co.uk%7Cc6ce798c284e48c7bf7308d7f0102152%7C7a109dbbbc1e4db2a56e6e23bef17d6f%7C0%7C0%7C637241824400500861&sdata=6VLGlrWRiAzqRKdEthTaAIdQgJ6T5chDhQP%2FWa4o9as%3D&reserved=0) to the country’s economic output. During the same year, the number of cybersecurity incidents reported by financial institutions [shot up by 1,000 percent](https://eur03.safelinks.protection.outlook.com/?url=https%3A%2F%2Fwww.bbc.com%2Fnews%2Ftechnology-48841809&data=02%7C01%7CAmberC%40whiteoaks.co.uk%7Cc6ce798c284e48c7bf7308d7f0102152%7C7a109dbbbc1e4db2a56e6e23bef17d6f%7C0%7C0%7C637241824400505859&sdata=IyXu1XRHztrh%2F5CSqK7uYtvkoYWIKrPHWiAFkg58l4o%3D&reserved=0) compared to the previous year.

![Sareeka A. G](https://prod.superblogcdn.com/site_cuid_cm5qst7v3003gwirgwqtxn8i8/images/sareeka-450x365-1736838919908-compressed.jpg)

Sareeka A. G

The greater the value of an organization’s data and assets, the greater the risk of a cyberattack. This holds true for financial [institutions](https://www.financedigest.com/top-5-security-technologies-that-every-finance-institution-workplace-should-consider.html "Top 5 Security Technologies That Every Finance Institution Workplace Should Consider"), as they contain not just huge reserves of money but also critical personally identifiable information (PII) and financial data.

Steel vaults and fortified [walls help safeguard money](https://www.financedigest.com/cineworld-eyes-wall-st-money-after-rival-amc-becomes-meme-stock.html "Cineworld eyes Wall St money after rival AMC becomes meme stock") within banks. Customer data, however, is often just waiting to be compromised unless a dedicated IT team and a [comprehensive cybersecurity strategy](https://eur03.safelinks.protection.outlook.com/?url=https%3A%2F%2Fwww.manageengine.co.uk%2Fit-compliance-suite.html%3Fpos%3DMEtab%26cat%3DITS%26loc%3Dhdng%26prev%3DAB2&data=02%7C01%7CAmberC%40whiteoaks.co.uk%7Cc6ce798c284e48c7bf7308d7f0102152%7C7a109dbbbc1e4db2a56e6e23bef17d6f%7C0%7C0%7C637241824400515852&sdata=EYHQDWDZSef7hCjr2CqcikbuTPGxq%2BKSBKylA93z0UY%3D&reserved=0) is in place. Here, AI can play a decisive role to help [financial services companies](https://www.financedigest.com/financial-companies-delivering-better-value-for-customers-in-loyalty-programmes-compared-to-other-sectors.html "Financial companies delivering better value for customers in loyalty programmes compared to other sectors") win the cat-and-mouse game between network administrators and cyber miscreants.

**Combating cyberattacks with AI**

[**Internal Threats**](https://www.financedigest.com/credit-squeeze-biggest-threat-to-economic-outlook-fidelity-international-says.html "Credit squeeze ‘biggest threat’ to economic outlook, Fidelity International says")

Most of the insider [threat](https://www.financedigest.com/the-future-of-finance-how-to-defend-against-the-top-threats-to-cloud-security.html "The Future of Finance: How to defend against the top threats to cloud security") s are financially motivated and particularly challenging to tackle as the threat actor knows where the sensitive data resides. Malicious insiders can involve in a myriad of activities ranging from theft of PII to siphoning funds and [money laundering](https://www.financedigest.com/are-compliance-and-anti-money-laundering-aml-regulations-hurting-your-sales.html "Are compliance and anti-money laundering (AML) regulations hurting your sales?").

Artificial intelligence in combination with machine learning is the most effective way to [tackle the insider menace](https://eur03.safelinks.protection.outlook.com/?url=https%3A%2F%2Fwww.manageengine.co.uk%2Flog-management%2Fueba%2Fuser-and-entity-behavior-analytics-software.html&data=02%7C01%7CAmberC%40whiteoaks.co.uk%7Cc6ce798c284e48c7bf7308d7f0102152%7C7a109dbbbc1e4db2a56e6e23bef17d6f%7C0%7C0%7C637241824400520851&sdata=GgzD5MGkGLI%2FBmzLTAlDmq4RFqATNmQQmhuVAJBj%2F0E%3D&reserved=0). By continuously monitoring the heterogeneous logs [collected from all the devices](https://www.financedigest.com/sales-of-vacuum-blood-collection-devices-are-forecast-to-reach-us-4-2-bn-by-the-end-of-2031.html "Sales of Vacuum Blood collection Devices are forecast to reach US$ 4.2 Bn by the end of 2031") and user accounts, behavior analytics tools that utilize machine learning can learn the each entity’s general behavior, or “baseline profile.” Once a baseline profile has been established, any deviation from this behavior is flagged as an anomaly and brought to the system administrator’s attention to initiate necessary action.

AI can immediately spot when an employee tries to [access](https://www.financedigest.com/matchly-the-us-fintech-platform-that-enables-employees-to-access-their-401k-employer-match-raises-1-7m-in-pre-seed-round.html "Matchly, the US fintech platform that enables employees to access their 401(k) employer match, raises .7m in Pre-Seed Round") information or perform unauthorized actions and warn IT administrators of a potential breach. Even in situations where the [insider has necessary permissions, behavior](https://www.financedigest.com/monitoring-insider-behavior-to-catch-intruders.html "MONITORING INSIDER BEHAVIOR TO CATCH INTRUDERS") analytics can identify irregularities and initiate corrective response by executing actions defined by the administrator.

[**DDoS Attacks**](https://www.financedigest.com/finance-industry-and-ddos-attacks-how-can-the-most-targeted-vertical-industry-protect-itself-from-ddos-attacks.html "Finance industry and DDoS attacks: how can the most targeted vertical industry protect itself from DDoS attacks?")

Proliferation of IoT devices has [made it easier for hackers to launch](https://www.financedigest.com/uks-made-com-to-cut-jobs-and-launch-strategic-review.html "UK’s Made.com to cut jobs and launch strategic review") massive distributed denial of service (DDoS) attacks, flooding servers with malicious requests to make services unavailable to legitimate users. In the era of social media, a [service outage due to DDoS can elicit response from disgruntled customers](https://www.financedigest.com/how-can-financial-firms-improve-customer-service-after-the-pandemic.html "How Can Financial Firms Improve Customer Service after the Pandemic?") to go viral in a matter of seconds, tarnishing the reputation of the company and eroding customer trust.

Employing [artificial intelligence](https://www.financedigest.com/types-of-artificial-intelligence.html "artificial intelligence") with big data can safeguard companies from DDoS attacks. AI and [big data analytics](https://www.financedigest.com/big-data-analytics-fraud-prevention-in-the-financial-sector.html "BIG DATA, ANALYTICS & FRAUD PREVENTION IN THE FINANCIAL SECTOR") can empower correlation engines to infer attack patterns by comparing network traffic with real-time data streams received from threat-intelligence feeds.

DDoS attacks are increasingly used a means of [cyber extortion](https://eur03.safelinks.protection.outlook.com/?url=https%3A%2F%2Fwww.bankinfosecurity.com%2Fcyber-extortion-fighting-ddos-attacks-a-8828&data=02%7C01%7CAmberC%40whiteoaks.co.uk%7Cc6ce798c284e48c7bf7308d7f0102152%7C7a109dbbbc1e4db2a56e6e23bef17d6f%7C0%7C0%7C637241824400525845&sdata=QvXJkkrBJjIjcjJ9OXIfJj%2BOsYtTpY4Qx8LhvgNgDK4%3D&reserved=0) by hackers who blackmail financial institutions to pay hefty sums of money to avoid the attacks. By monitoring a [bank’s network](https://www.financedigest.com/could-the-npa-be-the-catalyst-banks-need-to-transform-their-payment-networks.html "Could the NPA be the catalyst banks need to transform their payment networks?") for traffic origin, velocity, variety, and bandwidth consumption, AI can distinguish between legitimate spike in incoming requests and a DDoS attack and thereby prevent a full-fledged attack.

**_Phishing_**

Phishing is one of the most prevalent cyberattacks in the [financial sector](https://www.financedigest.com/iot-for-the-financial-sector.html "IoT for the Financial Sector"). New phishing techniques combined with social [engineering continue to endanger this sector](https://www.financedigest.com/switzerlands-engineering-sector-urges-country-to-start-energy-saving-now.html "Switzerland’s engineering sector urges country to start energy saving now"). A well executed phishing scam can have severe implications on a financial institution, ranging from credential theft to data exfiltration.

Natural language processing (NLP)—a subfield of AI—along with behavior analytics can help spot phishing emails. AI models can be trained with [data sets](https://www.financedigest.com/byd-set-to-be-chinas-top-selling-car-brand-for-nov-tesla-gains-data.html "BYD set to be China’s top-selling car brand for Nov, Tesla gains -data") to recognize clean and malicious files. AI models can identify, isolate, and delete infected attachments. In addition, NLP can be used to perform semantic analysis of text to spot malicious intent and blacklist related websites [and email addresses](https://www.financedigest.com/how-to-create-a-professional-email-address.html "How to Create a Professional Email Address").

Since social engineering requires very little technical knowledge and relies on victim manipulation, it [remains a very effective way to gain access](https://www.financedigest.com/fingerprint-scanners-to-remain-top-selling-accounting-for-over-one-third-of-access-control-demand-in-2021-future-market-insights.html "Fingerprint Scanners to Remain Top-selling, Accounting for Over One-third of Access Control Demand in 2021: Future Market Insights") into an organization.

Malicious payloads are often delivered to victims via instant messaging (IM) or as email attachments. AI can identify phishing schemes that are often overlooked by humans due to uncanny resemblance to legitimate sources.

**Embracing AI**

In cybersecurity, AI [improves the efficiency](https://www.financedigest.com/improved-patient-safety-efficient-dose-administration-and-seamless-interoperability-for-advanced-infusion-delivery-are-several-advantages.html "Improved patient safety, efficient dose administration, and seamless interoperability for advanced infusion delivery are several advantages") of defense mechanisms. It reduces the burden on information [security officials, enabling them to pay more attention to critical, IT security operations](https://www.financedigest.com/transport-operator-go-ahead-flags-cyber-security-breach.html "Transport operator Go-Ahead flags cyber security breach"). When trained appropriately and supervised by efficient cybersecurity professionals, AI can protect financial organizations from attacks that threaten their [operation](https://www.financedigest.com/stellantis-reshuffles-european-financing-operations-through-new-jvs-with-banks.html "Stellantis reshuffles European financing operations through new JVs with banks") and the country’s economy.


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