Cyber security in banking is one of the most important elements in finance today. Banks are not only responsible for their customer’s assets but are also liable for the funds if they go missing. Therefore, protecting a user’s assets via robust cybersecurity measures has become the primary goal in banking in 2023.
However, customer accounts are not only susceptible to hacking. As today’s society becomes cashless, more and more transactions are being conducted online. Digital payment data from the likes of credit or debit cards could prove a goldmine for hackers. Therefore, sophisticated cybersecurity measures are needed to protect those transactions.
Do banks use cyber security?
Banks do use cybersecurity but due to becoming a major target for cybercriminals, security measures are often out of date. Cybercriminals are constantly updating their attack methods which means banks must constantly update their cybersecurity measures. The best way to ensure you keep on top of the latest security measures is by continuously monitoring your attack surface and act immediately to any threat faced.
What happens if banks have bad cybersecurity?
There are now a wide range of cybersecurity technologies, methods and procedures used to prevent networks, programs, devices, and data from damage, theft, or attack. Cyber security in banking holds an extremely important value, not only to the institution but to its customers and merchants using the services. Banks deal with millions of transactions daily so it’s important for them to take protective measures to secure their data against cyberattacks. If banks fail to adequately protect their assets a whole host of issues can arise.
Let’s take a closer look at some of the reasons why banks should make cybersecurity their number one priority:
Loss to customers
A cyberattack not only affects the bank’s status but can cause significant loss to a customer. If a user loses money due to credit card fraud, the funds can be retrieved relatively quickly through the bank. However, if the funds are taken via data infringement or any other avenue, it can take a long time to retrieve the funds. This can be extremely worrying for the customer. Therefore, protecting customer assets is key.
Reputation
Data infringement can prove a serious issue for banks. Poor cyber security in banking can lead to a loss of customer assets, as well as damage the bank’s reputation. If the damage is severe, it will be hard for customers to find confidence in the bank and the knock effect of that could prove catastrophic, adding a bank’s reputation to the severe costs of a data breach.
Digitisation
The world is quickly moving towards complete digitisation. From ordering products online to organising meetings and making payments, we rely on digital platforms in our everyday lives. This only underlines the need for banks to advance their cybersecurity measures, as malicious actors can target online accounts or banking apps to gain access to funds.
Case studies of banks being cyberattacked
As cyber security in banking becomes more sophisticated so do the methods used by cyberattackers. Hackers are always able to find new and different ways to steal sensitive data. That’s why it’s important to ensure that cybersecurity measures are always up-to-date and continuously monitored for vulnerabilities.
Let’s take a look at two cyberattacks caused by poor cyber security in banking:
Canara Bank attack
Canara Bank has been the victim of unrelenting attacks from organised cyber gangs. It was targeted in 2016 and again in 2018. In the first case, a cyberattacker hacked and vandalised the bank’s website by blocking the bank’s e-payments and adding a malicious page to the site. The second attack saw the ATM servers targeted in India which caused widespread damage.
Union Bank of India attack
The Union Bank of India faced huge losses when it was targeted in 2017. Hackers gained access using a fake RBI employee ID. An employee of the bank fell for the phishing email scam and clicked on a malicious link which led to malware manipulating the system. The bank eventually got its money back, but only after a long fight and widespread reputational damage.
Some cyber threats banks face
Cybercrimes have become commonplace in the financial sector over the past few years. Hackers have improved their skills and secured more sophisticated software and equipment to conduct their crimes which make it a challenge for banks to protect their assets.
Let’s take a closer look at some of the top cyber security threats faced by banks:
Phishing
A phishing attack is a social engineering method used where an attacker sends a fake message or email designed to trick someone into revealing confidential information. The main motive behind a phishing attack is to manipulate the receiver into conducting an action through which a malicious actor can access sensitive information.
Phishing websites contain malicious code so when a victim clicks on a link within a message or email, the code will execute on the user’s device. Phishing attacks are conducted in such a way that a victim is unable to identify whether the email or message is from an authentic source or a hacker.
Malware
Malware is any software designed to cause disruption to a server, computer, client, or network. It can also deprive access to information, gain unauthorised access to information, interfere with a user’s computer privacy and security, and be responsible for data leakage.
Not encrypted data
Unencrypted data is unaltered data that can be accessed in its original form. Left unencrypted, hackers can manipulate the data and cause widespread damage to banks. All data must be encrypted, and sophisticated cybersecurity measures put in place to ensure that customer assets are secured, and bank data is protected.
Ransomware
Ransomware attack is a type of malware that threatens to publish data online or permanently block access to data unless a ransom is paid. While some types of ransomware simply lock the system without damaging files, more advanced malware uses a technique called cryptoviral extortion which can cause more severe damage.
Cloud-based cyberattacks
Cloud-based cyberattacks are any attack that targets off-site service platforms that provide cloud computing, storage, or hosting services via a cloud infrastructure. Attacks can include those on service platforms that utilise service delivery models like IaaS, SaaS, and PaaS. When thinking about cyber security in banking, it is vital to secure all your third-party cloud providers, as banks are extremely susceptible to these kinds of attacks.
Risks that come with remote work
Remote working risks include unsecure personal computers and home networks. These personal networks not only pose a great risk to a company’s assets but can also leave personal information wide open to attack. While firewalls and sophisticated cybersecurity measures are usually in place within the institution, it might be a different story at home, where home networks are usually unprotected. Therefore, it is important to stay up to date with cyber threats.
Solutions for banks with cybersecurity issues
The number one goal of cyber security in banking is to safeguard a customer’s assets and data. With that in mind, let’s take a closer look at some of the ways banking institutions can become more cyber secure:
Combined security
Banks are now moving towards a combined and united security model where all elements work and connect in a more advantageous way to protect both the bank and customer’s assets.
Multi-factor authentication
Multi-factor authentification adds an extra layer of security by requiring two or more methods of authenticating the user. This can include emails or text messages providing security codes, fingerprints, or facial recognition.
Cyber insurance
Cyber insurance (cyber risk insurance or cyber liability insurance) covers the losses related to damage or loss of information from IT systems and networks. There are many different types of policies, but the main ones cover loss and damage caused by data breaches or malicious cyberattacks. Cyber insurance provides key support to help businesses stay afloat.
Consumer awareness
Educating the consumer on the risks, what to look out for and to be vigilant is an important part of protecting assets. By highlighting the risks of fake emails, malicious attachments, and links, and to not reveal credentials, will add an extra layer of security to any business.
Antivirus and anti-malware applications
Antivirus and anti-malware software can identify dangerous programs and prevent them from spreading. Antivirus and anti-malware applications may also be able to help resolve malware infections, minimising the overall damage to a network.
Cybersecurity frameworks used by banks
Cybersecurity is a top priority for banks in 2023 but it can be difficult to pinpoint exactly what’s needed to protect an institution. Therefore, banks tend to choose a cybersecurity framework to ensure that they are safe and secure at all times.
Let’s take a closer look at two of the best cybersecurity frameworks and banking cyber security standards used today:
NIST cybersecurity framework
The NIST cybersecurity framework is a set of guidelines used for mitigating organisational cybersecurity risks published by the US National Institute of Standards and Technology (NIST). The NIST framework provides guidance on the protection of civil liberties and privacy in a cybersecurity context, and a high level risk taxonomy of cybersecurity outcomes and a methodology to assess and manage those outcomes. The framework is used by various governments and a wide range of organisations, businesses, and banking institutions worldwide.
FFIEC cybersecurity assessment tool
The Federal Financial Institutions Examination Council (FFIEC) developed the cybersecurity assessment tool to help institutions identify their risks and determine their cybersecurity preparedness. The assessment provides a repeatable and measurable process for financial institutions to measure their cybersecurity preparedness over time.
How RiskXchange can help
Cyber security in banking is key to protecting data, private information and assets. Banking cybersecurity protects all categories of data from damage to theft, and also helps build a wall of defence around an entire network or system.
Without an effective cybersecurity program in place, any organisation will be unable to defend themselves against hacks, data breaches or ransomware. The widespread increase of cloud services and larger attack surfaces mean companies are now more susceptible to cybercrime than ever before.
With the above in mind, RiskXchange is a respected provider of cybersecurity ratings and can fully assess potential threats to ensure your business is protected on all fronts. With full visibility over your eco-systems’ entire attack surface in near real-time, you can regularly monitor and mitigate risks to prevent unnecessary exposures.
Get in touch with RiskXchange to find out more about the importance of cyber security in banking.