Why Cybersecurity for Credit Unions is So Important in 2025

Imagine starting your day only to find that your credit union’s digital infrastructure has gone dark. On November 26, 2023, 60 credit unions experienced a ransomware attack that disrupted online banking, ATMs, and internal systems. Members like Mrs. Thompson, who urgently needed access to funds, were left in distress. Meanwhile, IT teams scrambled to coordinate with cybersecurity experts, and the branch managers worked tirelessly to manage the crisis. This scenario underscores a stark reality: cybersecurity for credit unions is not optional.

Cyberattacks on financial institutions are escalating at an alarming rate. The financial services sector is one of the top three most targeted industries, alongside healthcare and manufacturing. According to the IBM Cost of a Data Breach Report 2023, the average cost of a data breach in financial services exceeds $5.9 million. Moreover, studies from Javelin Strategy & Research reveal that nearly 40% of financial customers would consider switching institutions after a security breach.

Clearly, cybersecurity for credit unions is important, it is not just an IT issue. It is essential for protecting both institutional integrity and member trust.

The Growing Threat: Cybersecurity for Credit Unions

Cybercriminals continuously evolve their tactics, leveraging increasingly sophisticated attack methods. Some of the most pressing threats to credit unions include:

• Ransomware Attacks: Malicious software encrypts critical data, demanding payment for decryption keys. This was the scenario of the Trellance attack, which affected over 60 credit unions nationwide.
• Phishing Schemes: Fraudulent emails and messages trick employees and members into revealing sensitive information.
• Exploiting Unpatched Software Vulnerabilities: Cybercriminals target outdated systems, as seen in the Citrix Bleed vulnerability (CVE-2023-4966), which was a key entry point in recent attacks.

The consequences of these attacks go far beyond financial loss. Service disruptions can cripple online banking, ATMs, and customer support, creating frustration and panic among members. Non-compliance with cybersecurity regulations—such as NCUA, GLBA, and FFIEC standards—can result in severe fines and operational restrictions. Worst of all, a security breach can erode member trust, prompting customers to seek financial services elsewhere.

The Trellance Ransomware Attack: A Cautionary Tale

The 2023 ransomware attack on Ongoing Operations, a subsidiary of fintech provider Trellance, was a wake-up call for credit unions nationwide. The breach was more than just a few missed security patch—it highlighted broader industry vulnerabilities and the far-reaching consequences of vendor-related cyber risks.

Once attackers infiltrated the system, the impact was swift and severe. Over 60 credit unions faced crippling service outages, disrupting online banking, loan processing, and member transactions. Some institutions experienced days-long recovery times, exposing operational weaknesses in incident response planning.

This attack reinforced the importance of cybersecurity for credit unions:

• Vendor Risk is Institutional Risk – Credit unions heavily depend on third-party providers for core processing, but do they hold vendors to the same security standards?
• Proactive Patch Management is Non-Negotiable – The breach was preventable with timely software updates. A robust patch management strategy could have stopped attackers at the door.
• Regulatory Scrutiny is Increasing – The incident prompted renewed focus on NCUA cybersecurity governance, risk assessments, and regulatory audits.

Is your credit union prepared for a vendor-related cyberattack? Strengthen your security posture with a vendor risk assessment today.

A Proactive Approach to Cybersecurity for Credit Unions

Credit unions need to be proactive in their approach approach to security—waiting until an attack happens is no longer an option. Strengthening member data protection, monitoring for threats in real time, securing vendor relationships, and ensuring regulatory compliance, the modern credit union can build resilience against cyber threats and safeguard member trust.

Strengthening Member Data Security

Protecting sensitive financial data begins with fortifying access points. Cybercriminals often exploit weak authentication measures, making it essential to implement multi-factor authentication (MFA). By requiring multiple layers of identity verification, MFA significantly reduces the risk of unauthorized account access.

But securing logins is just the beginning. End-to-end encryption ensures that sensitive data—whether in transit or at rest—remains unreadable to attackers. At the same time, AI-powered fraud detection continuously analyzes transaction patterns, detecting suspicious activity in real-time before fraudsters can strike.

Proactive Threat Monitoring & Response

Cyberattacks don’t follow a 9-to-5 schedule, and neither should security monitoring. A 24/7 Security Operations Center (SOC) helps identify threats before they escalate. When an attack does occur, automated threat response systems help to contain the damage and prevent malware from spreading as well as block suspicious transactions, and isolate compromised systems.

Staying ahead of cybercriminals also requires regular penetration testing and vulnerability assessments. These tests simulate real-world attacks, allowing credit unions to identify weak points before hackers do.

Managing Vendor & Third-Party Cybersecurity Risks

Many credit unions rely on third-party service providers for core banking functions, but this dependency introduces additional risk. If a vendor’s security is compromised, the effects cascade down to the financial institutions they serve. This is why conducting rigorous cybersecurity audits is crucial—credit unions must assess their vendors’ security postures as critically as their own.

Beyond audits, contractual security obligations should be enforced to make sure that vendors comply with industry security standards. After all, a credit union’s cybersecurity is only as strong as its weakest third-party link.

Ensuring Regulatory Compliance

Regulatory bodies recognize the rising cyber threat to financial institutions, which is why compliance requirements continue to evolve. Credit unions must stay ahead by adhering to:

• NCUA Part 748, which mandates a security program to protect member information.
• GLBA Safeguards Rule, requiring financial institutions to implement data protection measures.
• FFIEC Guidelines, outlining best practices for cybersecurity resilience and risk management.

Beyond these regulations, staff training and incident response planning are the beginning of a strong cybersecurity preparedness. Credit union employees must be equipped to recognize phishing attempts, follow secure data-handling protocols, and respond effectively in the event of a breach.

Not sure if your credit union meets compliance standards? Take the first step by scheduling a cybersecurity audit today.

Future Cybersecurity Challenges for Credit Unions

• Quantum Computing Risks: Future decryption capabilities may render current encryption methods obsolete.
• AI-Powered Cyberattacks: Hackers are leveraging AI for sophisticated phishing campaigns and deepfake scams.
• Dark Web Marketplaces: Stolen financial data is increasingly traded on underground platforms.

To stay ahead, credit unions must adopt next-generation security solutions and continuously evolve their cybersecurity strategies.

Cybersecurity as a Business Priority

The crisis at Credit Unions during the Trellance breach is a true cautionary tale. Cybersecurity failures can result in financial, operational, and reputational devastation. Proactive cybersecurity for credit unions are no longer optional; they are a business requirement.

By implementing robust security frameworks, adhering to regulatory standards, and ensuring vendor accountability, credit unions can strengthen their defenses against ever-evolving threats.

Ready to safeguard your credit union’s future? Schedule a free cybersecurity risk assessment today.