Legacy Technology: The Hidden Cyber Threat in Financial Services

Why Outdated Infrastructure Leaves Financial Institutions Exposed—and How To Turn Risk Into Cyber Intelligence

As the cyber threat landscape in 2025 grows more sophisticated, financial institutions remain vulnerable not because of a lack of investment—but because they haven’t let go of legacy technology.

Despite advances in AI-powered cyber defense and cloud-native infrastructure, many banks, credit unions, and fintech firms still depend on outdated, unsupported systems that were never designed for modern threats. These legacy systems, often patched together over decades, are now a major liability.

Key Vulnerabilities in Legacy Systems

• Outdated encryption protocols: Many legacy systems rely on deprecated standards like SHA-1, leaving data exposed to modern decryption techniques.
• Lack of multi-factor authentication (MFA): Older systems often cannot support MFA, enabling credential-based breaches.
• Unpatched vulnerabilities: Legacy software frequently lacks vendor support, leaving known exploits unaddressed.
• Inadequate backup mechanisms: Traditional backups are vulnerable to ransomware encryption, unlike modern immutable solutions.

Legacy systems in financial institutions remain a critical vulnerability, exposing both large enterprises and smaller organizations to sophisticated cyberattacks. Recent incidents highlight how outdated technology, coupled with evolving threat tactics, creates systemic risks across the sector.

The Rising Cost of Legacy Vulnerabilities

Legacy systems are hard to secure and easy to exploit. Their outdated encryption protocols, lack of multi-factor authentication, and unpatched vulnerabilities create wide openings for attackers. In 2024:

• Barclays experienced an outage caused by integration failures between legacy and modern systems, disrupting customer transactions.
• USAA saw sensitive data from 32,000 U.S. military personnel exposed due to authentication vulnerabilities in its legacy infrastructure.
• Fidelity Investments saw 77,000 customer records compromised after attackers exploited poor security training and legacy database configurations, exposing weaknesses in social engineering defenses and outdated internal systems.

Small Firms, Big Risks

Smaller institutions are no exception. In 2024:

• Patelco Credit Union experienced ransomware phishing attacks which bypassed legacy email filters, leading to a two-week shutdown and exposure of 1 million records. The credit union’s outdated incident response protocols delayed recovery.
• FBCS exposed 4.2 million records linked to Truist Bank and Comcast after unauthorized access went undetected for weeks due to gaps in legacy network monitoring tools.

The Hidden Cost of Legacy Infrastructure

Third-Party Risks Amplified

The 2024 Faster Payments System outage brought critical operations at Barclays, HSBC, and Virgin Money to a standstill—demonstrating how deeply the financial sector depends on aging third-party infrastructure. This dependency introduces systemic risk, particularly as 60% of financial institutions report that their extended detection and response (XDR) tools fail to adequately monitor legacy application layers.

Modernization Roadblocks

Legacy systems are more than just outdated code—they are compliance hazards. The Office of the Comptroller of the Currency (OCC) notes that legacy platforms complicate adherence to NIST and CJIS standards, increasing exposure to legal and regulatory penalties. Meanwhile, modernization remains stalled at many institutions: 82% continue to rely heavily on obsolete web application firewalls, despite their known ineffectiveness against zero-day threats—a tradeoff often driven by limited budgets.

These challenges highlight a critical reality: legacy infrastructure isn't just a technical liability—it's a business risk. Closing these gaps requires a strategic shift toward proactive modernization and intelligent risk assessment.

How RiskAct™ Helps Financial Institutions Break Free from Legacy Risk

RiskAct, developed by NetraScale™, empowers financial institutions to move beyond reactive security models tied to outdated infrastructure. By delivering real-time threat intelligence, legacy system risk scoring, and actionable mitigation guidance, RiskAct enables teams to proactively identify and resolve vulnerabilities before they escalate. Whether you're navigating compliance complexities or planning phased modernization, RiskAct is purpose-built to reduce operational risk and safeguard digital trust in a rapidly evolving threat landscape.

Learn more about NetraScale’s Cyber Intelligence framework and explore how RiskAct’s beta program is helping early adopters visualize and manage their cyber risk more effectively.

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