Cybersecurity in Finance

Cybersecurity in the financial sector involves the protection of digital systems, data, and communication networks from unauthorized access, theft, manipulation, or disruption. It is vital for safeguarding customer trust, preventing systemic contagion, and enabling secure digital innovation.

Key cyber threats in finance include phishing attacks, malware and ransomware, distributed denial-of-service (DDoS) attacks, zero-day vulnerabilities, and insider threats. Financial firms are frequent targets due to the high value of financial data and transactional systems.

Cybersecurity obligations are shaped by the EU Digital Operational Resilience Act (DORA), NIS2 Directive, GDPR, PSD2, and Basel cyber risk guidance. Globally, frameworks such as the NIST Cybersecurity Framework and ISO/IEC 27001 provide standardized approaches to cyber risk governance.

DORA harmonizes digital operational resilience rules across EU financial entities. It mandates ICT risk management, incident reporting, digital testing (TLPT), third-party risk oversight, and cyber resilience strategy alignment with board-level accountability.

Institutions must identify, assess, monitor, and mitigate risks from IT systems, data infrastructure, and external vendors. This includes cybersecurity policies, access controls, vulnerability management, encryption standards, and staff training protocols.

Firms must deploy real-time threat detection systems, incident escalation protocols, and recovery plans. Regulatory requirements include reporting major incidents within defined timeframes to national authorities and the European Supervisory Authorities (ESAs).

Cloud services and third-party providers must be monitored under strict contractual and technical standards. Under DORA and EBA Guidelines, financial institutions must ensure business continuity, data protection, and auditability of outsourced ICT services.

Threat-led penetration testing (TLPT), including red teaming, is required for critical systems. These tests simulate real-world cyberattacks and assess the institution's ability to detect and respond effectively, in line with sectoral benchmarks.

Cybersecurity and data privacy are interconnected. GDPR mandates that personal data be processed securely, with technical and organizational measures to ensure confidentiality, integrity, and availability—especially in the event of breaches.

Payment systems, securities settlement systems, central counterparties, and digital banking platforms are designated as critical infrastructure. Their cybersecurity resilience is paramount to national and EU-level financial stability planning.

As financial services digitize, neobanks and fintech platforms must build secure-by-design systems. API vulnerabilities, poor authentication mechanisms, and insecure mobile interfaces represent growing risk vectors under PSD2 and eIDAS regulations.

Cybersecurity is now a board-level strategic issue. Boards must integrate cyber risk into enterprise risk management (ERM), define key risk indicators (KRIs), and cultivate a risk-aware culture across business units and IT teams.

Institutions may purchase cyber insurance to hedge against financial losses from attacks. Policies vary in coverage scope, and insurers increasingly require robust cybersecurity governance and incident history disclosure during underwriting.

Financial authorities encourage information sharing via threat intelligence platforms (TIPs), industry consortia (e.g., FS-ISAC), and public-private partnerships. Early warning systems and coordinated response protocols enhance sector-wide resilience.

In Slovenia, financial institutions are supervised by the Bank of Slovenia and ATVP under national transpositions of DORA, NIS2, and GDPR. The Information Commissioner oversees data protection compliance, while SI-CERT supports incident handling.

AI-powered cyberattacks, quantum computing risks, IoT vulnerabilities, and geopolitical cyber conflicts are reshaping the threat landscape. Regulatory frameworks will increasingly focus on proactive digital resilience and cross-border coordination.