The 2024 FinWise data breach serves as a stark example of the growing insider threats faced by modern financial institutions. Unlike typical cyberattacks originating from external hackers, this incident stemmed from unauthorized access by a former employee using retained credentials.
On May 31, 2024, the ex-employee accessed FinWise Bank’s systems after leaving the company and leaked sensitive personal information belonging to 689,000 customers of American First Finance (AFF). Even more alarming, this unauthorized access went undetected for more than a year before being discovered by the bank on June 18, 2025.
The most troubling aspect of the case lies in the time gap between the initial breach and its discovery. FinWise Bank only became aware of the incident and notified affected customers in June 2025 which was over a year after the breach occurred.
FinWise Data Breach: The Problem
Lawsuits allege that the stolen data may not have been adequately encrypted and secured, causing public criticism and concern.
Security experts emphasize that a well-designed information protection framework must not only encrypt critical financial data but also proactively detect and prevent abnormal access attempts.
FinWise Bank’s failure to implement such basic safeguards, coupled with potentially poor encryption practices, has led the institution to face legal action and heightened scrutiny from regulators and customers alike.
FinWise Data Breach: The Answer
Although FinWise has yet to issue an official statement regarding its encryption practices, the data breach will result in irreversible damage to both the company and its customers.
In incidents like the FinWise breach, encryption serves as the last line of defense for data. However, true data protection goes beyond encryption alone; it also requires key management and access control measures.
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