Cyber Security for Financial Services in Australia

Cyber security for financial services in Australia is no longer just an IT concern. It is a prudential, legal and commercial priority that sits with the board. Banks, insurers, superannuation funds and fintechs hold the two things attackers want most, money and sensitive personal data, and they operate at the heart of a payment system the whole economy relies on. That combination makes the sector one of the most targeted in the country.

This briefing looks at the threats facing Australian financial firms in 2026, the regulatory obligations that shape their security programs, and why offensive testing has become core assurance rather than an optional extra.

Why Financial Services Is a Prime Target

Financial firms concentrate value in a way few other sectors do. A successful attacker can move money, commit fraud at scale, or exfiltrate records that fuel identity theft for years. Because the reward is so high, the sector attracts more capable and more persistent adversaries, from organised criminal groups to opportunistic fraud rings.

The impact of a serious incident is rarely contained to the technical damage. It can include:

• Direct financial loss through fraud, unauthorised transactions and extortion.
• Exposure of customer personal and financial information, triggering notification obligations.
• Operational disruption to services that customers and businesses depend on daily.
• Regulatory scrutiny from APRA and ASIC, and lasting damage to trust and reputation.

For a sector whose entire business model rests on trust, that last point matters as much as the immediate cost.

The Threats That Matter Most

Attackers follow the money, and in financial services the attack paths are well worn. The threats that consistently cause the most harm include:

• Account takeover and credential theft, where stolen or phished credentials enable fraud and unauthorised access to customer accounts.
• Payment and transaction fraud, targeting the flows where value actually moves.
• API and application weaknesses, especially as open banking and digital services expand the number of internet-facing endpoints.
• Ransomware and extortion, which can freeze operations and increasingly involve data theft as leverage.
• Third-party and supply chain compromise, where an attacker reaches a firm through a supplier or shared platform.
• Business email compromise and social engineering, which continue to bypass technical controls by targeting people.

The common thread is that many of these attacks exploit gaps between controls rather than a single missing control. That is exactly why testing how controls behave together, under realistic pressure, matters so much.

API and Payment Risk in a Digital Sector

The shift to digital banking, embedded finance and open data has expanded the attack surface dramatically. Every new mobile feature, partner integration and open banking connection is another set of APIs that must be secured. Attackers know this, and poorly secured APIs are a common route to sensitive data and transaction functions.

Payment flows deserve particular attention. The logic that authorises a transaction, applies limits, or verifies a payee is a prime target because a flaw there translates directly into financial loss. Testing that focuses on business logic, authorisation controls and the way systems handle unexpected input often finds issues that automated scanning simply cannot see. A thorough penetration testing program that covers web, mobile and API surfaces is essential for firms that move money digitally.

Customer Data and Third-Party Risk

Financial firms hold deep, sensitive profiles of their customers, from identity documents to transaction histories. Protecting that data is both a regulatory duty and a matter of customer trust. A breach that exposes this information can enable identity theft and fraud long after the incident itself.

Third-party risk compounds the challenge. Modern financial services rely on a web of providers for cloud infrastructure, payments, core banking, analytics and customer engagement. Each connection is a potential path in. APRA's standards make it clear that a firm remains accountable for security even where the work sits with a supplier, so testing scope needs to consider critical third-party connections and shared platforms, not only the firm's own systems.

APRA CPS 234 and CPS 230

Two prudential standards shape security programs across the regulated part of the sector. CPS 234 Information Security requires entities to maintain security capabilities matched to their threat profile, define clear roles and responsibilities, protect information assets, and systematically test the effectiveness of their controls. The phrase that matters most is control effectiveness. It is not enough to own a security tool, you must be able to show it stops the attacks a capable adversary would actually attempt.

CPS 230 Operational Risk Management broadens the lens to operational resilience, critical operations and the management of material service providers. The two standards work together. CPS 230 sharpens the focus on the third parties and critical operations a firm depends on, which widens the natural scope of security testing.

For boards, the message from both standards is consistent. Accountability sits at the top, it cannot be delegated away, and independent testing that is reviewed and acted upon is central to meeting the obligation. A structured security maturity assessment can help benchmark current controls and governance against these expectations, so testing effort lands where the risk is greatest.

Why Offensive Testing Is Now Core Assurance

Compliance frameworks increasingly ask a simple question: do your controls actually work? Offensive security answers it directly. Rather than confirming that a control is present, testing puts it under realistic pressure and shows whether an attacker would get through.

Different techniques answer different questions:

• Penetration testing gives focused, technical assurance on specific applications, APIs, networks and cloud environments.
• Red teaming simulates a realistic adversary across people, process and technology, testing whether the organisation can detect and respond, not just prevent. A well-scoped red team engagement is the closest a firm can get to a real attack without the consequences.
• Coordinating findings with incident response planning ensures that if prevention fails, detection and recovery hold up under a genuine crisis.

The value is not the report itself but the loop it drives: find weaknesses before an attacker does, remediate them, retest to confirm the fix worked, and report clearly enough for the board to exercise real oversight. That loop is exactly what APRA supervisors and independent reviewers look for.

Financial services firms increasingly run this as an ongoing program rather than an annual event, because their environments change constantly and their adversaries never stop. Firms operating out of major hubs often pair national coverage with local delivery, and StrikeCyber supports engagements across the country including penetration testing in Sydney and other capitals.

Building a Program That Holds Up

The firms that handle cyber security well treat it as genuine assurance, not paperwork. They scope testing to what would hurt most if compromised, blend the depth of manual testing with the breadth of automation, bring critical third-party connections into scope, and close every significant finding through retesting. Above all, they keep the board informed with reporting that supports real decisions.

If you need financial services security testing scoped around your real risks and reported in a way your board and APRA can rely on, our team of expert operators can help. Explore our penetration testing services, review our red teaming capability, or get in touch for a scoping conversation. You can also call StrikeCyber on 1300 654 898.