Introduction:
Financial institutions stand on the brink of a technological revolution shaping how they operate and serve their customers.
In 2025, financial institutions are inclined towards change, driven by new banking technologies, artificial intelligence (AI), and cloud computing.
In today’s world, cloud computing has become a priority as it is deemed a key driver for innovation, operational efficiency, and digital transformation while keeping its promise of scalability, cost-effectiveness, and delivering a seamless customer experience.
What is Cloud Computing?
Cloud computing is on-demand, which allows users to access files, software, and servers through their interconnected devices, such as PCs and smartphones.
Providers can store and process data in a remote location separate from the users’ devices, eliminating the need to own and maintain physical servers and hardware.
The financial industry handles massive amounts of data daily, including sensitive information that must be managed securely. This can be done through cloud computing.
However, with every technological innovation comes risk, and by risk, we mean cyber threats that can lead to successful attacks.
Every business is under threat, and while it’s vital to reduce risk to minimise threats, the actual killer is a successful cyber attack. It doesn’t matter how many threats there are if they can’t get past your defences. Hence, the stronger your defences, the less risk there is of a successful cyber attack occurring.
From ransomware attacks demanding multi-million dollar payouts to cloud misconfigurations exposing customer records, the financial sector is a prime target for cybercriminals.
This blog will explore the top cloud security threats facing financial institutions today, real-world breaches, and successful attacks that have rocked the industry. Finally, it will explore proven strategies that financial institutions can use to safeguard their cloud environments.
In finance, trust is everything, and once it’s lost, it’s nearly impossible to regain.
The Growth of AI-Driven Detection and Mitigation: How Secure is it?
Artificial intelligence (AI) has the potential to transform fraud detection and risk assessment.
Its core strength lies in recognising patterns and deviations. This allows banks to evaluate transactions in real time as potential fraudulent activities occur, ultimately preventing problems from arising in the first place.
You may be wondering how this is possible…
…but it’s simple.
While human teams take time to identify and understand new fraud trends, AI can recognise and adjust to these patterns overnight.
Alongside AI-powered voice analytic tools that can identify risks in voice and complex network analytics platforms, AI can assess potential risks more efficiently than human teams ever could.
That said, AI is not perfect because it is not fully developed to the point where it can operate independently; hence, human oversight is needed.
For instance, in the past, AI has generated false positives and flagged legitimate transactions as suspicious, suggesting that AI models can be vulnerable to adversarial attacks by cybercriminals.
Thus, making it clear that while AI can enhance security, it cannot fully replace human-driven detection and mitigation.
Major Cloud Security Risks for Financial Institutions
In this section, we will cover the major cloud security threats that financial institutions suffer from and how they can prevent such risks from occurring. This includes cloud misconfigurations, credential & phishing attacks and ransomware attacks.
Cloud Misconfigurations: The Silent Threat
Ever thought that your cloud services are set up incorrectly?
If the answer is yes, you may be at risk of cloud misconfiguration. This refers to any glitches, gaps, or errors that could compromise your cloud environment and expose your sensitive data.
Even the slightest doubt should be considered and checked out promptly. Gartner’s survey reveals that human error is responsible for 80% of all data security breaches. This is expected to increase as cloud failures are predicted to rise to 99% in 2025.
A misconfigured firewall in Capital One’s AWS storage was exploited by a former AWS employee, resulting in the leak of 106 million customer records. The exposed data included sensitive information such as bank account details and other personal information. This led to reputation damage and millions in fines ($190 million in settlements) as financial institutions are expected to comply with strict data protection laws such as GDPR, PCI DSS, and SOX.
Hackers use automated tools to scan the internet for misconfigured cloud databases, making financial institutions easy targets if they’re not secured properly.
So, how can this be prevented?
Financial Institutions must aim to implement multi-layer access controls which allow only authorised employees to access sensitive data. This includes AWS IAM policies and Google Security Command Centre, allowing real-time security scanning to detect misconfigurations.
Finally, it is important to encrypt stored and transmitted data through Azure Disk Encryption. This prevents unauthorized access, reduces exposure from misconfigurations, and strengthens financial institutions’ resilience against cyber threats. Ultimately, it lessens the predicted rise of cloud failures and breaches.
Credential Theft and Phishing Attacks:
Even the strongest and most protected cloud security can be bypassed with a stolen password.
All it takes is phishing. This includes phishing emails, which are fraudulent emails disguised as messages from trusted institutions asking users to log in or to reset their passwords.
Other attacks include spear phishing (attacks on financial employees/executives) and credential stuffing, which is when cyber attackers use passwords from previous breaches to gain access to banking systems.
All we ask is to be cautious because there are ‘so-called’ Dark Web Marketplaces that sell stolen financial credentials. Not to mention, the bypassing of Multi-Factor Authentication (MFA), where attackers are using SIM-swapping attacks to take over phone numbers. JP Morgan Chase Cyberattack (2014) is a famous example where hackers stole an employee’s credentials, which gave them access to 90+ financial systems, compromising 76 million customer records.
Another one to be wary of is social engineering, a type of psychological manipulation that influences people into performing actions or divulging confidential information.
So if someone comes across as overly eager to build a relationship or is asking for sensitive information, we would advise not to respond to their demands.
How can Financial Institutions defend against Credential Theft and Phishing?
- Adopt a Zero Trust Security Model, which will ensure no login attempt is automatically trusted.
- Train employees and customers on phishing awareness. Knowing the difference between a real and a fake email is key.
- Use biometric authentication to reinforce security measures, making MFA strong again!
Ransomware Attacks: Financial Institutions Taken as Hostage
Ransomware is one of the most brutal and devastating threats known to financial institutions today!
Hackers infect financial systems with malware that can encrypt critical files, ultimately locking out employees and customers. This usually leads to the demand for ransom payments (often in cryptocurrency) in exchange for decrypting these critical files.
You may be wondering why ransomware attacks are highly targeted in the financial industry…
In simple terms, it is because they cannot afford downtime, as a delayed transaction or inaccessible banking system can result in financial losses, reputational damage, and regulatory scrutiny.
Attackers know this, which is why they aggressively target financial institutions, confident that banks will pay to restore operations quickly.
Since many financial institutions are transitioning many of their services to an online setting, cyber attackers can exploit weak points in their cloud security.
Hence, it is important to conduct regular backups, and always have a plan B! However, you need to ensure these backups are stored separately so that lost data can be restored without paying a ransom.
Other ways Financial institutions can protect themselves against ransomware attacks:
- Endpoint Detection & Response (EDR): Monitor all employee devices for ransomware activity.
- Network Segmentation: Prevent ransomware from spreading across critical financial systems.
- Zero-Day Patch Management: Financial institutions must patch vulnerabilities quickly to prevent exploits.
Time to Wrap Up: Is Cloud Technology Really Worth The Risk?
The truth? Cloud technology is exceptional, and it is reshaping financial institutions, offering scalability, efficiency and seamless customer experiences. But like every innovation we’ve seen, it comes with risk.
These risks include misconfigurations, ransomware attacks, phishing and credential theft, putting the financial sector under constant fire from cybercriminals.
However, cloud computing has proved to be essential for financial institutions, allowing them to stay competitive in a digital-first economy. But security needs to be taken seriously! By embedding the right security measures into every stage of cloud adoption, financial institutions can take cloud technology to the next level.
Here’s How to Strengthen Your Cloud Computing and Data Security:
- Enforce a Zero Trust Security Model: Never assume trust. Verify every user and device accessing cloud environments.
- Implement Multi-Factor Authentication (MFA) & Biometric Security: Strengthen login security to prevent credential theft.
- Encrypt Data at Every Stage: Use strong encryption protocols to protect sensitive information in storage and transit.
- Automate Cloud Security Audits: Continuously scan for misconfigurations using real-time monitoring tools like AWS Security Hub and Google Security Command Centre.
- Train Employees and Customers on Cyber Threats: A well-informed workforce and customer base are the best defence against phishing and social engineering.
- Develop a Ransomware Response Plan: To mitigate ransomware risks, ensure robust backup strategies, incident response teams, and cyber resilience frameworks.
At the end of the day, a balance between innovation and security is a must. Those who take security seriously and invest in proactive risk mitigation strategies will not only safeguard their institutions but also uphold the most critical asset in finance, trust.
Because once trust is lost, it’s nearly impossible to regain!
Internal Links:
https://www.forti.fi/blog/cybersecurity-trends-2025/
https://www.forti.fi/blog/passwords-passwords-passwords/
https://www.forti.fi/blog/ransomware-7-ways-to-protect-your-business/
External Links:
https://www.future-processing.com/blog/a-brief-guide-to-cloud-computing/
https://cybersmart.co.uk/2022/11/5-tips-for-improving-cloud-security/