5 Email Security Mistakes Financial Services Firms Could Easily Avoid

For financial organisations, email remains a trusted method for communicating with clients, customers, and partners.

It is also one of the most common routes for data loss, impersonation, and account compromise.

Without additional layers of security, everyday email can leave sensitive client and customer data exposed to interception, misdelivery, or unauthorised access.

Below are the top five email security mistakes financial services firms make most often, what they cost in practice, and practical ways to reduce the risk.

1. You Have Sent Sensitive Data ‘In the Clear’

If you have not encountered the term before, sending an email ‘in the clear’ means transmitting sensitive information without encryption.

Despite the responsibility to protect personal data, this remains a common mistake in business communications.

Sending or receiving personal data through unencrypted emails exposes it to email interception, where attackers monitor and access messages to steal information.

One effective countermeasure is using a dedicated email encryption solution tailored for business use.

Email providers like Outlook and Gmail offer Transport Layer Security (TLS) encryption, but on its own this often is not enough to protect message content end to end or to give firms clear evidence of who opened a sensitive message.

Where regulated client data is sent by email, a dedicated system with end-to-end encryption is widely recommended by industry bodies.

For instance, ICO guidance on encryption advises using encryption to support GDPR and other regulatory expectations.

Read more about encryption and its role in data protection.

"In financial services, email still carries statements, identity checks, and advice documents. If those messages are sent without encryption, the firm is relying on transport security alone - and that is a different level of protection from controlling who can actually open the message."

Paul Holland, Founder and CEO, Beyond Encryption (Mailock)

Encryption addresses one part of the risk. Sender mistakes can still expose regulated data if the wrong person receives the message.

2. You Have Sent a Document or Message to the Wrong Recipient

Most teams have seen the moment an email goes to the wrong person, especially when it contained sensitive information.

Misdirected emails are a leading example of human error in cybersecurity, contributing to 95% of security breaches.

Asking the unintended recipient to delete the message is not always enough. Recalling or revoking access is often the safer response when sensitive data has left the firm.

Microsoft supports message recall in Outlook for eligible Microsoft 365 work or school accounts, but the feature is conditional: it usually requires both parties to be in the same organisation and the recipient not to have opened the message.

Using a solution that automatically blocks access to emails can provide a safer alternative to relying on your email client’s native features alone.

3. You Use or Reuse a Weak Password for Your Email Account

Passwords are your email account’s first line of defence.

Using weak or reused passwords is one of the easiest ways for threat actors to compromise accounts and read the personal data inside them.

Common weak passwords include simple sequences like 123456, password, and qwerty. They also include personal information like pet names or street addresses.

Weak passwords expose your business to cyber attacks that can breach accounts and access the personal data within your emails.

It is crucial to create strong, unique passwords for each account. Recommended passwords are at least 12 characters long and include a mix of numbers, symbols, and both uppercase and lowercase letters.

4. You Aren’t Using Multi-Factor Authentication

If unauthorised parties obtain your login details, accessing your account becomes straightforward unless you add another check at sign-in.

Multi-factor authentication (MFA) requires two or more verification steps to access your account. These steps can include:

• Something you know, like a password or the answer to a security question
• Something you have, such as a PIN code sent to your device
• Something you are, such as a fingerprint, facial recognition, or retinal scan

Activating MFA for your email account significantly boosts its security. For sensitive outbound messages, recipient authentication adds a separate check on who can open the content.

"MFA protects sign-in. It does not, on its own, tell you whether the right client opened a sensitive attachment or whether you can revoke access after a message was sent to the wrong address."

Michael Wakefield, CTO, Beyond Encryption (Mailock)

Even with MFA enabled, phishing remains one of the most common ways attackers turn a single click into wider compromise.

5. You Have Clicked an Unfamiliar Link in an Email

Phishing attacks occur when cybercriminals send emails pretending to be reputable organisations or individuals to steal data or install malware. They often encourage recipients to click on a link.

It is crucial to verify the legitimacy of emails in your inbox. Here’s how:

• Check the sender's email address. Is it familiar? Does it belong to the claimed sender’s domain?
• Examine the grammar and spelling for errors
• Hover over the link to see if the URL directs to a legitimate website
• Be wary if the sender is pressing for urgent action or threatening negative consequences for not responding

Investing in cybersecurity training and phishing awareness for employees helps keep security top of mind when dealing with suspicious emails.

Where firms send regulated client information by email, combining staff training with encryption, recipient authentication, and message controls reduces different parts of the same risk.

FAQs

Why Is Sending Data in the Clear Risky?

Standard email can expose sensitive content if it is misaddressed, intercepted, or accessed by the wrong person.

How Do Wrong-Recipient Mistakes Happen?

Autofill, similar names, rushed sending, and weak review steps can send confidential material to the wrong inbox.

Which Habits Reduce Email Security Mistakes?

Use MFA, avoid weak passwords, check recipients before sending, and use secure email when messages contain sensitive information.

References

World Economic Forum Finds That 95% of Cybersecurity Incidents Occur Due to Human Error, Cybernews, 2023

Most Common Passwords List, Nordpass, 2023

How to Create a Strong Password, Cybernews, 2023

ICO Guidance on Encryption, Information Commissioner's Office, 2022

Reviewed by

Sam Kendall, 31.05.26

This content is for general information only and is not legal advice.