By Katie Barnett, Director of Cyber Security, Toro Solutions
The threat landscape is shifting fast.
In the past year, we’ve seen not only more attacks on firms in financial services but also more sophisticated ones. The sector has always been a high-value target, but today’s threats are more complex, persistent, and harder to detect than even a few years ago.
Attackers aren’t just after disruption anymore. They want long-term access, valuable data, and ways to exploit the trust within systems and between people. These aren’t opportunists – they’re well-funded, highly skilled, and patient adversaries.
The financial toll is growing, too. IBM reports the average cost of a breach in this sector is £4.54 million.[1] But beyond the money, the damage to customer trust, regulatory standing, and brand reputation can be even harder to repair.
In 2025 finance organisations needs to focus on resilience. The ability to detect, respond, and recover quickly, whether the disruption is from a ransomware attack, a compromised third party, or a simple human error.
Increasingly, regulators are setting clear expectations around incident response, continuity planning, and systemic risk mitigation – making it critical for institutions to build security strategies that support both business continuity and regulatory compliance.
Below are the key threats facing financial organisations today, and the steps you can take to stay ahead of them.
Phishing and Social Engineering
Phishing – tricking people into revealing sensitive information remains a major threat. In 2024, 23% of global phishing attacks targeted financial institutions.[2]
Mitigation strategy:
- Review your organisation’s digital footprint for exposed employee details or breached credentials.
- Run regular phishing simulations, including QR code (“quishing”) and voice-based (“vishing”) attacks.
- Provide ongoing training so employees can identify and report suspicious activity confidently and without fear of blame.
Cloud Security Issues
As firms in financial services continue to embrace digital transformation, the shift to cloud environments introduces new complexities and vulnerabilities that must be carefully managed. Cloud breaches can be catastrophic because they provide cyber criminals with direct access to sensitive data and systems, potentially allowing them to operate undetected for extended periods of time.
Mitigation strategy:
- Maintain a clear asset inventory and regularly scan for shadow IT.
- Conduct security configuration reviews to ensure available security features are turned on and configured according to industry best practice.
Insider Threats
The insider threat whether intentional or accidental remains one of the hardest risks to manage. Incidents are rising, and costs are growing. Despite increased awareness, most organisations still don’t have the tools or processes in place to manage these risks effectively.
Mitigation strategy:
- Conduct background checks and assess online activity for privileged users.
- Monitor digital behaviour, especially for senior staff, to reduce risks from public exposure.
- Apply the principle of least privilege: give users only what they need – nothing more.
- Ensure Joiners, Movers, and Leavers processes are tightly controlled to manage access across employee lifecycles and reduce identity-based attack surfaces.
Ransomware
Ransomware continues to be one of the most severe threats. Beyond encrypting data, attackers now commonly steal and sell it, adding extortion to the equation. The financial sector, rich in sensitive data, remains a prime target.
Mitigation strategy:
- Regularly back up data to secure, offline locations.
- Maintain a well-rehearsed incident response plan, including clear communication and regulatory reporting steps.
- Deploy continuous monitoring and detection tools to catch early signs of ransomware activity.
Supply Chain Vulnerabilities
Cyber threat actors are increasingly targeting firms in financial services by exploiting weaknesses in their supply chains. These indirect attacks can be just as damaging as direct breaches, often exacerbated by limited visibility and control over external systems.
While supply chain risk is particularly pronounced in fintech due to its heavy reliance on third-party platforms, the threat is just as relevant across the broader financial services sector.
Hedge funds, for example, often depend on external analytics platforms, trading systems, market data feeds, and outsourced IT or cloud infrastructure. A breach through any of these touchpoints could expose proprietary trading strategies, sensitive client information, or critical operations.
Private equity firms face a layered challenge. In addition to managing their own vendor relationships, they must also account for third-party risks across their portfolio companies. Each acquisition brings a unique set of external dependencies, often with varying levels of security maturity, which can introduce risk into the broader firm ecosystem.
Mitigation strategy:
- Rigorously vet vendors and assess their security practices.
- Require contractually binding security standards.
- Implement Just Enough Access (JEA) for third-party users.
- Enforce a Zero Trust approach to all external connections.
- Continuously monitor third-party activity and perform regular risk reviews.
Final Thoughts
Cyber security in the financial services sector is no longer just about protecting data – it’s about protecting trust, continuity, and the ability to operate in an increasingly hostile environment. The threats facing us are more sophisticated, more targeted, and more disruptive than ever before.
By focusing on resilience, embedding security into every layer of your business, and preparing for the inevitable rather than simply hoping to avoid it, financial institutions can stay ahead.
This means investing in the right technologies, nurturing a strong security culture, and constantly re-evaluating risk as the environment changes.
The goal isn’t just to defend against cyber threats, it’s to make sure you can keep delivering the services your customers rely on, even in the face of adversity.
For more information or advice and support with any of the above, get in touch with Katie Barnett, Director of Cyber Security at Toro Solutions, or Karen Allan, Partner and Head of Financial Services.
[1] https://www.northdoor.co.uk/insight/blog/the-rising-cost-of-data-breaches-in-the-financial-industry/
[2] https://www.bravurasecurity.com/blog/identity-security-challenges-in-finance
