XDR: Proactive financial institution security
From reactive to proactive: XDR as a strategic imperative for financial institutions
Faced with a growing number of increasingly sophisticated attacks, financial institutions can’t afford to be lax about cybersecurity. For many institutions, the approach to this essential aspect of operations has been reactive; however, this is no longer a reliable strategy. Extended Detection and Response (XDR) is the solution for institutions looking to re-strategise and adopt a proactive stance.
Cyber attacks demand a proactive response
Recent research into cyberattacks in the UK makes it clear that attacks on financial institutions are not a matter of “if” but “when.” Government figures reveal 50% of businesses and 32% of charities reported some form of cybersecurity breach or attack in 2023/2024. Other research takes a narrower approach, indicating that 58% of UK financial services firms experienced at least one third-party supply chain attack in 2024, with 23% targeted at least three times.
In addition to third-party supply chain attacks, financial institutions are at risk of:
- Advanced persistent threats (APTs)
- Data breaches and intellectual property theft
- Distributed denial-of-service (DDoS) attacks
- Insider threats
- Payment system fraud
- Phishing and social engineering
- Ransomware attacks
Financial losses aren’t the only consequence of a successful cyberattack. While this may be the most obvious of them, financial institutions would also need to grapple with shaken trust and reputational damage. Depending on the severity, size, and number of institutions affected, cyberattacks can also pose a risk to the national or global economy.
Given the strict regulatory requirements placed on these institutions by the FCA Handbooks, UK GDPR, and Operational Resilience framework, cybersecurity breaches also put them at risk of legal consequences. It’s clear, then, that the only solution is to take a proactive approach. This is what XDR is designed to do.
XDR: holistic, proactive protection
To answer the question of what is XDR, the simplest answer is that it’s a unified platform that uses AI-driven analytics, continuous monitoring, and automated responses to provide financial institutions with a holistic approach to cybersecurity. Unlike endpoint detection and response (EDR) systems, XDR platforms bring together detection, investigation, and response capabilities across domains such as cloud applications, organisational endpoints, hybrid identities, and data, email, and workload stores.
With this cybersecurity solution, institutions have full visibility across networks, servers, human touchpoints, APIs, mobile apps, and online banking. They can rely on XDR to detect and respond to suspicious behaviour or threats as and when they happen, as opposed to trying to damage control after the fact.
XDR system components
XDR platforms’ broad functionality and powerful capabilities are possible due to the various components comprising these platforms. The components typically incorporated into XDR platforms include:
- AI and machine learning: These components offer entity and user behaviour analytics, and they detect anomalies, provide alerts, and prioritise active threats automatically.
- Automated response playbooks: Financial institutions’ security teams can use these playbooks, which include a collection of remediation actions, to strategise and automate threat responses. Playbooks can be run automatically or manually.
- Data collection and storage: XDR platforms can connect to various data sources, such as on-site, cloud, and hybrid environment tools and third-party applications, to gather, process, and store substantial volumes of raw data.
- EDR tools: The inclusion of EDR tools in XDR platforms allows them to monitor IoT devices, laptops, mobile phones, and other endpoints and detect, investigate, and respond to potential cyberattacks that bypass antivirus software.
- Additional threat detection and response tools: XDR platforms also include mobile threat detection tools, cloud and data security tools, and identity protection and email security functionality.
- Security analytics engine: These engines analyse individual alerts and categorise them into incidents with the help of AI and automation. They also apply cyber threat intelligence, which is contextual, in-depth knowledge of threatened or in-progress attacks.
XDR and threat detection
The various components of XDR platforms work together to provide impressive threat detection. This detection of potential cyberattacks is characterised by various functions, one of which is unified visibility of institutions’ various infrastructures for the reduction of blind spots.
Beyond this, XDR uses behavioural analytics and AI to detect anomalies characteristic of the low-and-slow tactics associated with advanced cyberthreats. These platforms’ automatic correlation of alerts and prioritising of threats allow for faster incident responses, whether by using automation to block malicious domains or isolate affected endpoints or by alerting security teams, who can initiate manual responses.
Additionally, XDR platforms offer efficient investigation and forensics, allowing teams to reconstruct cyberattacks and identify weak points and root causes faster than they would if they relied on traditional cybersecurity solutions. Lastly, these platforms can automatically heal affected assets by isolating affected user accounts or devices, deleting malicious forwarding rules, or stopping malicious or suspicious processes. The result is stronger, more adaptive protection against cybersecurity threats.
How XDR compares to traditional cybersecurity tactics
There are several areas in which XDR far outshines the cybersecurity tactics traditionally relied on by financial institutions. Comparing them, we find:
- Cyber incursion examination: Whereas XDR offers automation, traditional tactics require human intervention.
- Data harmonisation: XDR incorporates a wide range of sources, while traditional solutions rely on abridged specific sources.
- Issue resolution: While XDR provides automated actions based on extent and consequences, traditional solutions’ issue resolution actions must be performed manually.
XDR: Proactively powerful cybersecurity
XDR’s many use cases offer financial institutions a significant amount of flexibility in the face of complex and manifold cybersecurity threats and challenges. With these platforms, cyber threat hunting is automated. They proactively disrupt potential threats and in-progress attacks before they can do damage.
By providing data collected across attack surfaces, analysis of root causes, and categorising abnormal cybersecurity alerts, these platforms enable security teams to investigate attacks or threats in greater depth. In addition, XDR platforms automatically analyse emails that may be part of phishing attacks, and they analyse user behaviour to identify potential insider threats.
XDR is a non-negotiable for financial institutions
Far outperforming traditional and reactive cybersecurity solutions, XDR platforms enable financial institutions to face the future with confidence. By constantly learning and adapting to increasingly complex threats and attacks from within and without, these platforms are nothing less than integral to any cybersecurity strategy aimed at proactively preventing and resolving threats. If financial institutions are looking for a solution to future-proof their security architecture, this is it.