Roberto Popolizio
Updated on: July 31, 2025
In this article the SafetyDetectives cybersecurity team reveals a hidden cybersecurity crisis unfolding within the banking sector.
We will discuss at the overlooked dangers of internal access mismanagement, the financial and reputational toll of insider threats, and the simple steps companies can take to prevent multi-million dollar breaches before they happen with the help of Andrew Lokenauth, former Wall Street executive with 15 years of banking experience and founder of TheFinanceNewsletter.com.
How Privilege Misuse Becomes a $12M Cybersecurity Threat
According to Verizon’s 2023 Data Breach Investigations Report, 74% of breaches involve a human element, including privilege misuse, stolen credentials, and social engineering.
The cost? Up to $12 million per breach, and growing.
Among these human failures, and despite spending billions on firewalls and threat detection, the banking sector continues to overlook a very basic vulnerability: internal access mismanagement.
According to IBM’s Cost of a Data Breach Report, insider threats and privilege misuse remain among the top contributors to breach costs, with the average breach taking 280 days to identify and contain.
In mid-sized financial institutions, this translates to $3.8 million lost annually — often passed on to small business customers in the form of higher fees and slower service.
The problem is that most banks are running on a spaghetti mess of legacy systems, temporary fixes, and third-party integrations. So it’s a danger coming from inside the system, not from hackers.
And the incentives are misaligned: enterprise tech vendors profit from complexity, selling patches instead of prevention, while executives lean on plausible deniability and avoid costly upgrades by outsourcing their risk.
Real-World Impact: When Offboarding Goes Wrong
Lokenauth recalls one high-stakes incident during his time at Cover Genius:
“A former employee still had administrative access to critical financial data six months after leaving. The exposure was massive. Cleaning it up cost time, trust, and a significant amount of money.”
The problem is compounded by how inaction is normalized. Without a zero-trust architecture or automated de-provisioning, even basic offboarding becomes a blind spot.
This isn’t just an IT problem. it’s a systemic risk to consumer trust in digital banking.
Bottom Line
Everyone’s focused on the next phishing scam or AI-driven malware, but the real danger is outdated permissions and third-party access nobody’s tracking.
Don’t trust the system.
Verify everything.
Sources:
https://www.ibm.com/reports/data-breach
