Top 10 cybersecurity risks and threats for the banking sector in 2025

The banking sector is at the dawn of the digital transformation. Technology offered immense potential but at the price of being constantly on the radar of cyber criminals targeting their information assets that may contain the most sensitive data.   

To meet the growing competition by creating new experiences for customers, banks and financial institutions have started integrating AI/ML and are offering new services that are entirely digital.  Today, banks can offer click-of-a-button services meant for smooth, quick, and unique experiences to their customers.  

However, to make this possible, they are liable to ensure the smooth functioning of the digital platforms that process, store, and manage customer data. Due to this, banks are under high pressure to maintain security for all the information assets of their customer-specific financial data and personal information.  

They are also liable to adhere to compliances they are subjected to by local and global regulatory compliance bodies.   

What makes the banking sector vulnerable to cyber-attacks? 

There are multiple reasons why banks will be more vulnerable to cyberattacks unless they identify potential risks and take measures for

1. Changing cybersecurity regulatory requirements  

Evolving cyber threats pose greater risks to banking operations and information assets, so regulatory bodies will keep making improvements in the cybersecurity requirements expected from banking institutions. The consequences of non-compliance will become stricter, with more severe fines for non-compliance with regulations like PCI DSS, GDPR, and DORA. There are also regulations like the Digital Operational Resilience Act for the financial sector that will take effect from January 2025.   

2. API and third-party integration 

APIs are one of the most favorite targets for cybercriminals because of the increase in usage of APIs. There were 66% more organizations using more than 100 APIs compared to last year (Salt Security 2024, State of API security).  Unassessed APIs of bank-related applications can expose them to the threat of cyber attack.  

2025 will see a rise in API attacks, with cybercriminals leveraging AI to carry out more persistent attacks. Therefore, banking institutions must regularly assess the security of their APIs and proactively address them to prevent risks. 

3. Cloud-specific vulnerabilities 

Banks have become dependent on cloud services to render their services and operate better. However, this has made them more vulnerable to cybercriminals who exploit the security vulnerabilities left unaddressed in cloud platforms used by the banks.  Once cybercriminals exploit the misconfigurations in cloud platforms, they can engage in data theft/alteration, change access permissions, cause operational disruptions, and inflict considerable damage to the bank.  

4. Unencrypted data 

A lot of data on banking platforms remains unassessed for unencrypted data and cyber attackers can easily access this data. Cybercriminals may go one step further to engage in ransomware attacks by encrypting all data or simply stealing all data through a breach. They may even sell the stolen data on the dark web for a price.   

Banking will witness an upward trend in fraud, credential theft, and phishing in 2025, with a significant rise in ransomware attacks. Banking institutions will have to deploy security mechanisms to encrypt all the sensitive information, securing it from the threat of data breach. 

Some of the eye-opening cyber-attacks in the banking sector in 2024

This year, we have witnessed some of the biggest cyber-attacks in the banking sector. The following are some of them: 

• More than 300 banks were disrupted due to cyber attack on payment technology provider, C-Edge in India  
• American Express Co. suffered a third-party data breach that caused exposure of cardholders’ data   
• Citizens Bank got data breached in September compromising personal data including names, social security numbers and account numbers 

Truist bank faced a third-party breach that caused exposure of personal data of its customers

Cyber threats for the banking sector in 2025 

The following are some of the cyber threats that will be faced by the banking sector in 2025: 

5. Malware and Ransomware attacks

Since banking institutions process and store huge amounts of information, they become a favorable target for cybercriminals looking to encrypt them in exchange for a ransom. Experts predict there will be a rise in ransomware attacks in 2025, with an increase in sophistication and frequency of ransomware attacks on banks posing more risk and damage to data assets and infrastructure. Additionally, banks are at increased risk of paying ransom, which is usually in millions or even billions of dollars or paying fines due to non-compliance to the regulatory bodies.  65% of financial institutions reported a ransomware attack in 2024(Statista).

6. AI-based threats

The increased use of AI in rendering banking services, like the use of AI-based chatbots to create new customer experiences, has exposed banks to a new range of cyber threats. In response to this, cybercriminals are leveraging artificial intelligence to orchestrate attacks on banks based on theft, reverse engineering, and manipulation of machine learning models. They may also engage in data poisoning attacks that are based on manipulating the data that is fed to machine learning models such that they produce incorrect results or cause misbehavior.  There will be more attacks in 2024 on banks based on artificial intelligence-based tools that are highly persistent and difficult to detect by standalone measures of security.   

7. Social engineering attacks

Since the introduction of AI-based chatbots, even non-native English-speaking cyber attackers have used these chatbots to create social engineering-based phishing emails and make them more legitimate and believable. Cybercriminals target users on social media platforms like WhatsApp and Telegram and engage in social engineering techniques to lure them into installing malicious applications meant to steal their data or inject malware into their systems. They might also lead them to a fake banking website asking them to engage in a banking transaction. The next year will see an increase in social engineering attacks on banks. 

8. Advanced Persistent Threats (APT)

As banking institutions move towards more digital avenues to stem their growth, cyber attackers put more time into studying their targets, making these modern threats highly challenging to detect. Since the banking sector forms a part of the critical infrastructure, state-sponsored threat actors continue to make their moves against the banking sector to cause undetected prolonged persistence in networks with their attack campaigns.  

Therefore, in 2025, it should become a top priority for banks to secure all their sensitive intangible digital assets and enhance the security of their transactions. Attackers may use Living-off-the-land (LotL) attacks, using legitimate tools and features preexisting in their target infrastructure to camouflage themselves into their network. LOtL attacks will be one of the top concerns for banks in 2025 since they are the toughest to detect. 

9. Insider Threats

What makes insider threats the most dangerous is that employees already have access privileges and can leverage existing permissions to orchestrate attacks without getting detected. As per Searchlight Cyber research, one of the most popular posts on forums on the dark web was initial access broker posts where they would provide info on exploitable vulnerabilities to gain access. It contained posts on infiltration methods like SQL injection and remote code execution.   

In many cases, experts have found that a cybercriminal would even recruit a bank employee to give out important intel on their bank’s security setup.  In 2025, banks must be able to predict the tactics deployed by adversaries since they will face a higher risk of insider threats.  They must leverage cybersecurity expertise to predict adversarial activities and exposure of security information to prevent unauthorized access to systems and data.  

10. Third-party vendor breach 

Since banks depend on third-party vendors to render their services digitally, any cyber-attack on third-party vendors could have a major impact on the operations and reputation of the bank. The International Monetary Firm has highlighted third-party vendor reliance as one of the key issues in their study in 2024. Banks must take proactive measures for risk management across third-party vendors. Banks will have to make regular assessments of infrastructure for security weaknesses, an integral part of contracts with third-party vendors in 2025. 

Some interesting facts 

(source: Verizon, Statista, Semperis, 2024) 

• 78% of attacks in the banking, financial, and insurance services sector were due to system intrusion, miscellaneous errors, and social engineering 
• 98% of attacks in the banking, financial, and insurance services sector were orchestrated with a motive of financial gain 
• 75% of data stolen in the sector was personal data 
• 88% of ransomware attacks globally were targeted toward the finance sector 
• The finance sector faced 5% of state-sponsored attacks in 2024