3 Social Engineering Tactics Targeting the Financial Services Industry

Social engineering is a modern spin on an age-old scam—leveraging human psychology to manipulate individuals into handing over sensitive information, money, or access. Unlike brute-force cyberattacks that rely on cracking passwords or breaching firewalls, social engineering tactics bypass technology altogether, targeting trust, human error, and urgency.

It’s not often a hacker in a dark room, backlit by green code. Sometimes, it’s a convincing email from a “trusted” bank representative, a fake login page mimicking a real one, or a fraudulent executive request that appears urgent. These tactics exploit human behavior as much as technology, making them especially dangerous for financial institutions.

Why Financial Services Are Prime Targets for Social Engineering

Financial services institutions hold high-value assets—customer funds, PII (personally identifiable information), and critical account credentials. And cybercriminals know that financial institutions rely on digital platforms to interact with customers, process payments, and facilitate transactions. This widespread digital footprint presents an opportunity for nefarious social engineers to infiltrate systems using deception, impersonation, and manipulation.

Social Engineering Basics

Unlike other cyberattacks, social engineering requires little technical skill—just deception, persuasion, and timing. Cybercriminals often impersonate trusted institutions, executives, or employees to gain access to sensitive data or financial transactions.

Consider this example: A leading bank that has built a reputation of trust and reliability is ideal for criminals to leverage in a phishing campaign or social media attack. After all, if you’ve had an account with them for years. When they send an email that your account needs attention, you are more likely to react to that than to a communication from an unknown organization.

Common social engineering tactics include:

• Pretexting –  Fabricating a story to convince victims to give up valuable information or access, often used in conjunction with phishing.
• Phishing emails – Deceptive emails impersonating banks, payment providers, or executives requesting login details or urgent wire transfers. 
• Smishing (SMS Phishing) – Fake text messages claiming suspicious activity on an account, urging recipients to click malicious links.
• Social media impersonators – Fake bank representatives or executives luring customers into scams. 
• Fraudulent banking alerts – Pop-ups or emails requesting users to “verify” their identity by entering credentials. 
• Spoofed domains & fake login pages – Cybercriminals create lookalike bank login pages to steal user credentials. 
• Spear phishing – Highly targeted attacks aimed at specific employees, executives, or departments. 
• Baiting – Offering a fake incentive (e.g., a security update or free financial advice) to trick users into downloading malware. 
• Scareware – Creating fake urgency (e.g., "Your account has been compromised!") to push victims into taking immediate action.

It may be hard to believe that these attacks are so effective, but phishing and pretexting via email continue to be the leading cause of incidents accounting for 73% of breaches, according to the 2024 Data Breach Investigations Report by Verizon.

Unfortunately, financial institutions are high-risk targets for these attacks due to the sheer volume of customer data and financial transactions they handle. Let’s break down three of the biggest social engineering threats targeting financial services today.

3 Social Engineering Tactics that Target the Financial Services Industry

As mentioned above, social engineering campaigns have evolved to target a variety of different facets of the financial services industry. However, these attacks have moved beyond sending emails to customers with false information. Although the traditional methods of social engineering – phishing emails and text messages – are popular, the following three threats pose a particular risk in the financial sector. 

1. Scams Targeting Cryptocurrency and NFTs

Cryptocurrencies and NFTs (Non-Fungible Tokens) have redefined the financial landscape, but they’ve also opened new doors for cybercriminals. Attackers frequently deploy phishing scams, fake marketplaces, and fraudulent investment opportunities to steal digital assets.

Example Attack: During a contract migration on OpenSea, one of the largest NFT marketplaces, cybercriminals sent phishing emails mimicking official communications, tricking users into visiting fake websites and signing fraudulent transactions. The cybercriminals were then able to steal hundreds of high-profile NFTs worth $2M USD collectively.

Financial institutions that support either cryptocurrencies or traditional currencies are particularly vulnerable. Adversaries continue to distribute infostealing malware — that specifically targets credentials linked to crypto wallets — to steal digital assets. Well-known strands, such as Cryptbot and Redline remain the most prevalent while others including BHUNT and META pose risks as well.

2. Phishing and Smishing to Distribute Malware

While phishing and smishing attacks are not new, they remain one of the most effective ways for cybercriminals to deliver malware and ransomware to financial institutions. Employees and customers alike are targeted with deceptive emails, texts, and even voice calls.

Why Phishing and Smishing is Growing:

• Phishing kits—prebuilt phishing templates available on the dark web—make it easy for cybercriminals to deploy large-scale phishing campaigns.
• Advanced malware strains, including Medusa, Emotet, and Agent Tesla, are frequently distributed through malicious email attachments.
• Impersonation scams are increasingly using AI-powered voice cloning and deepfake video to enhance credibility.

Example Attack: A Q1 2022 phishing campaign impersonated financial institutions to deliver TeaBot Remote Access Trojan malware, which allowed attackers to take full control of infected devices.

3. Conversation Hijacking 

Conversion hijacking is a specific social engineering tactic that’s a threat to financial services, as well as retail and the public sector, that often gets underplayed. It’s harder to detect because attackers insert themselves into ongoing email or messaging conversations. Once the conversation has been hijacked, it can be difficult to back track and know what they got access to, making it crucial to never share confidential information online via email.

How conversation hijacking works:

1. Cybercriminals gain access to an email account (often through phishing or credential leaks).
2. They observe ongoing conversations—especially those involving financial transactions or sensitive discussions.
3. They intervene at a strategic moment, impersonating an employee or vendor to redirect payments, request sensitive information, or spread malware.

Example Attack: A financial executive’s email was compromised, and attackers inserted themselves into a high-value wire transfer conversation. They altered bank details at the last moment, rerouting millions of dollars to fraudulent accounts.

How Financial Institutions Can Defend Against Social Engineering

Although social engineering tactics will continue to be a steady threat to nearly every industry, there are a few actionable steps to take to safeguard against them. 

•  Educate Employees & Customers – Regular security awareness training can help employees recognize phishing attempts, social engineering tactics, and impersonation scams. 
• Enhance Verification Protocols – Implement multi-factor authentication (MFA) and establish strict verification for financial transactions and sensitive requests. 
• Invest in Threat Intelligence & Monitoring – Utilize real-time dark web intelligence and brand monitoring to detect impersonation attempts and credential leaks before they become full-scale attacks.

The Bottom Line for Financial Institutions

Social engineering attacks aren’t slowing down—they’re evolving. Cybercriminals are leveraging AI, advanced phishing kits, and human psychology to trick employees, exploit customer trust, and steal financial data. Financial institutions must stay proactive to outmaneuver social engineering threats before they cause financial and reputational damage.