NBFCs and Insider Threats: Trust Turned Vulnerable

Quick Take

But the problem of insider threats in NBFCs (Non-Banking Financial Companies) is huge, and a problem that organizations continue to ignore until it is too late. Whether it be a disgruntled employee peddling information, a careless employee clicking unauthorized links, or even a trusted administrator committing an error in good faith, the threat from within can be as damaging as attackers situated outside the network.

I’ve seen it firsthand. Poor security hygiene, weak access controls, and inadequate internal monitoring all exacerbate these threats.

Key Takeaways:

• No internal security controls make NBFCs an easy target.
• The threat of malicious insiders and careless employees.
• It also mitigates insider threats with zero-trust security policies.
• Security culture over security tools — every time!

The Challenge: Insider Threats within the NBFCs

The NBFCs are custodians of sensitive financial data ranging from credit histories to loan approvals and many of these companies aren’t catching up with internal security risks. While external threats (like cybercriminals, malware, and ransomware) are easy to focus on, what about the risk inside your company?

I’ve done security work for banks and financial firms that had amazing perimeter security — firewalls, intrusion detection, all of that. But guess what? The largest breaches I’ve witnessed originated from the inside. Employees clicking on phishing emails. Admins making mistakes with permissions. Executives sharing sensitive info on WhatsApp.

Types of Insider Threats

In short, not all insider threats are created equal. Some are evil, some are just sloppy. They can all result in severe financial and reputational harm.

1. Malicious Insiders

These are the dangerous ones. There is someone internal to your business (a current/former employee, contractor, or even executive) that maliciously abuses access:

• Selling data that others use — to competitors or criminals.
• Tampering with systems before they leave the company.
• Dropping backdoors for future access.
• Cranking out ransomware from the inside (yes, I have witnessed this happening).

2. Negligent Insiders

These people aren’t active perpetrators of harm, but they cause it — accidentally. And let’s face it, these are the most frustrating:

• Clicking on phishing links (hey, that bank alert email seemed legit).
• Weak passwords (still using P@ssw0rd123?).
• Shadow IT — using unapproved apps that expose sensitive data.

3. Compromised Insiders

This one’s tricky. An employee is not evil, but the credentials they own are stolen. Suddenly, a hacker inside your network is using valid logins to steal data. No firewall can stop this.

Real-World Examples

Case 1: The Admin Who Stole Data on His Way Out

One bank I worked with had an IT admin who was leaving for a competitor. He downloaded gigabytes of proprietary customer data, moved it to his personal laptop, and walked off with it. The scary part? No one noticed for weeks.

Why?

• No internal monitoring.
• Store without data loss prevention (DLP).
• Too much access. He had far more permissions than he should have had.

Case 2: The Complacent Employee Who Clicked on a Phishing Email

Another NBFC handled an employee who received an email that appeared to be precisely like an internal IT request — only, it was not. It requested he validate his login credentials. He did. Attackers logged in remotely and stole thousands of customer records and exfiltrated financial data. One mistake. And it cost millions.

Case 3: The Vendor Backdoor Breach

Here’s a fun one (if you like cyber horror): A vendor had access to an NBFC’s systems for remote maintenance. Only problem? Their employees were repurposing passwords — passwords compromised in a different breach. Hackers signed in, circumvented security, and introduced malware.

It wasn’t even a breach from within the bank. It was a third party that was a compromised insider.

Best Practices: How to Safeguard Against Insider Threats

So what’s the fix? Better tools? Smarter AI? No. The best defense is not technology; it is policy, process, and people.

1. Zero-Trust Architecture

I have implemented zero-trust security for three banks, and it is a game changer. It means:

• Never trust, always verify.
• Restrict access—no one has more privileges than necessary.
• Monitor continuously. UBA (user behavior analytics) can flag anomalous activity.

2. Internal Monitoring & Logging

Unless you can see what is happening inside your network, you cannot prevent insider threats from occurring. At the very least, you need:

• SIM or SIEM (Security Information and Event Management).
• Data Loss Prevention (DLP) tools.
• Admin privileges managed through Privileged Access Management (PAM).

The key? Real-time alerts. If suddenly someone is opening files they shouldn’t, then you need to intercept that before ‘delete’ or ‘send’, you have to jump in before that and stop that.

3. Security Awareness Training (Really It Works)

The vast majority of incidents are not sophisticated cyberattacks. It is also important to train employees to understand how to spot phishing scams, how to use password managers, and how to identify suspicious or unusual activity; it can save your company a great deal of money — a variety of breaches.

4. Tight Access Control & Least Privilege Policies

One thing I’ve learned: Most employees have far more access than they need. Fix that.

• Restrict access to sensitive data.
• Enable multi-factor authentication (MFA).
• Monitor privilege escalations.

Establishing a Security-First Organization

Here’s the thing — a bad security culture won’t be solved by technology. You can install the best cybersecurity tools on the market, but the results will be meaningless if your employees don’t give a damn. That’s why there’s no real fix that involves simply firewalls or AI-based threat detection (don’t get me started on AI security hype). It’s forcing your team to make security second nature.

Here are some avenues for fostering a security-first culture:

• Make every employee feel like part of the security team.
• Encourage responsible security practices. (Extra security steps are annoying for users, but rewarding them for compliance works.)
• Be clear on security policies—and don’t count on 100-page manuals that no one reads.

Conclusion: Trust Is a Double-Edged Sword

You have to trust your staff — the world wouldn’t turn otherwise. But trust without verification? That’s a recipe for disaster.

If an NBFC needs to realize, it is that insider threats are no less risky than outsiders. Negligence, compromised accounts, and malicious insiders aren’t theoretical risks — I’ve witnessed them occur over and over.

Invest in:

• Strong internal controls.
• Real-time monitoring.
• Security-first training.

Because when trust is a vulnerability, cybersecurity is what protects you.