Trust – is a common thread that runs between banking and cybersecurity. While trust and credibility are the foundation of banking, implementing effective cybersecurity strategies enables organizations of all kinds to nurture trust and credibility among customers.
So, proactive financial cybersecurity is imperative for banks and financial institutions to upkeep trust and credibility in the digital age.
To do so, you need to be aware of the biggest threats concerning banking and cybersecurity, and this article will throw light on the same.
Banking and Cybersecurity: The Need and Importance
The banking industry is going through rapid digital transformation to cater to the changing customer behavior and preferences, the emerging market demands, and the technological advent. The treasure trove of sensitive data that banking contains has made the industry a lucrative target for threat actors.
Given the growing volumes of digital transactions, the treasure trove of sensitive data and criminals do not have to don ski masks today to loot banks as technology provides them with quieter, easier, and insidious ways.
Here are some banking and cybersecurity facts and figures to put things in perspective:
- 74% of banks and financial institutions have experienced a rise in security incidents since the beginning of the global pandemic, and 42% attribute this to remote working – cybersecurityventures.
- The average cost of data breaches for the banking and financial services industry in 2021 was USD 5.72 million, the second highest among all industries – IBM.
- As per another study, the per company cost of cybercrime in the financial services industry is USD 18 million, 40% higher than the average cost – cybersecurityventures.
- The average time taken to identify and contain data breaches in the banking industry is around 233 days. That is nearly 8 months! This is one of the main contributors to the high cost of data breaches as attackers have ample time to siphon off money, steal data, etc.
These banking and cybersecurity statistics iterate the need for banks and financial institutions to know about and protect themselves against their threats.
Biggest Security Threats in the Banking Industry
1. Unencrypted Data
One of the biggest cybersecurity issues in the banking sector is storing/ transmitting sensitive data without encryption. Encryption helps reduce the impact of data breaches on the organization as attackers may not be able to use/ exploit data if it is encrypted immediately.
If not, attackers can instantly do their bidding while the financial organization will have to suffer damaging consequences regardless of its size.
Malware is a major, longstanding cybersecurity threat in the banking sector. Attackers inject/ install malware into the bank’s network through various techniques such as injection attacks, phishing, spoofing, compromising end-user devices, etc.
Though PC and mobile malware has seen a drop in the past few years, malware targeted at corporate users is rising. Attackers can create backdoors, takeover accounts, siphon off money, gain access to sensitive information once the malware is installed/ injected into the system.
Ransomware attacks enable attackers to freeze systems/ networks by injecting malware and making it unavailable to end-users and bank employees until the ransom is paid.
As financial organizations kept paying huge ransoms, ransomware attacks became a lucrative threat vector to cybercriminals and a major cybersecurity issue in the banking sector. The result – there was a 1318% increase in ransomware attacks against the banks in H1 2021 alone.
4. Social Engineering
Social engineering attacks, especially phishing, vishing, whaling, and spoofing, are banking and cybersecurity and are major security threats. These attacks target people – the most vulnerable links in cybersecurity – instead of technology, processes, or security defenses.
Attackers manipulate and coax unsuspecting users (end-users, employees, C-suite leaders, etc.), triggering fear, sympathy, or other emotions into urgently performing actions such as giving away login credentials, making money transfers, etc. they otherwise wouldn’t.
5. Data Manipulation
Another major cybersecurity issue in the banking sector is data manipulation. Not all attackers want to steal data. They may simply want to manipulate data. For instance, modify, delete or add records.
It is particularly insidious that the alterations may go unnoticed for months and years after the attack. But when it is detected, the financial organization becomes liable to pay exorbitant sums of money in damages.
6. State-Sponsored Attacks
Attacking an enemy nation’s banking industry is probably one of the best ways to bring that country’s economy to a grinding halt or destabilize the government. As a result, state-sponsored cyber attacks are serious threats to the banking industry.
To prevent these top threats, intelligent, proactive, and well-designed financial cybersecurity policies and practices are critical. They will save financial organizations from the cost of financial, legal, and reputational damages while keeping the trust and credibility intact.