Organized cybercriminals are leaving traditional bank robbers in the dust. Nowadays, the banking sector’s most significant security concerns come in the form of online threats. Banks and other financial institutions process millions of transactions daily, with the majority of the transactions done via digital payment transfer platforms. For that reason, banks have become enticing targets for cybercriminals.
So how can the banking sector stay ahead of new attack methods and improve its cybersecurity posture? Let’s find out.
Top 3 cyber risks in banking
In life, there will always be risks, but knowing which risks to be aware of can help you mitigate them in the future. Here are the top 3 cyber risks banks should look out for:
1. Third-party data breaches
Hackers will always find new ways to perform data breaches. New bank services and online systems that allow for swift transactions and account maintenance have opened a new door. As banks and consumers become more digitally intertwined, hackers are simultaneously utilizing shared banking systems and third-party networks to execute attacks. If these systems are not amply protected under a cybersecurity plan, hackers can easily breach the network.
2. Mobile apps
As more individuals access their bank account via mobile applications, cybersecurity risks increase. Most users do not actively secure their personal devices, which means they have low to no security protection in the event of an attack. This makes the magnitude of an attack much bigger. Utilizing a safe banking software solution is key to avert malicious activities from your mobile apps.
3. Cryptocurrency hacks
Invented in 2009, cryptocurrency is still new and many of the decentralized currency markets have not been properly secured. During this 10-year period, there have been many major hacks on crypto exchanges and other cryptocurrency-related services as a result of phishing, malware, and targeted attacks. The harsh reality in the industry is that, outside of crypto wallets and blockchain technology, there aren’t many ways to implement banking cybersecurity software in crypto. Without added security, attackers will have an easier time stealing coins and profiting off of market increases.
4 reasons why cybersecurity is important in banking
Your money should be protected physically, but now it is equally as important to be protected from a digital perspective. Below are just a few reasons why cybersecurity is vital within the banking sector:
1. Prevent financial losses
Imagine going online to transfer funds from your account and finding a series of large fraudulent charges in your log? Generally, when this happens, an individual’s funds can be quickly recovered by their bank, but this isn't always the case with a data breach.
When a bank experiences a data breach that results in the loss of customer funds, this money can take some time to recover. Not only does it impact the bank’s reputation but it also causes considerable stress for the customer. To prevent breaches, banks need to implement a cyber risk management plan that protects their network against all breach attempts and ensures financial security for their customers.
2. Protect customer data
Once a customer notices fraudulent activity, it is already too late. The instant a customer's private information has been stolen or breached, the scale at which it is distributed can make it hard to revert. Cybercriminals sell personal information on the black market to be used in further hacking schemes and breaches. As banks expand their clientele, they need to ensure proper cybersecurity systems are in place to protect their network and most importantly, their customers' personal information.
3. Preserve bank’s reputation
According to Security Magazine, 80% of customers will defect from using a business if their information is compromised and 85% of those individuals will tell others about their negative experience. Reputation is everything for a business, especially for a bank. Practicing good cybersecurity methods and implementing continuous security monitoring reflects positively on a bank and promotes trust. This is extremely important within an industry that is responsible for the financial wellbeing and personal data of each of its customers.
4. Avoid penalties for FDIC non-compliance
Rules and regulations are in place for customer protection, and if these rules are broken or bypassed, banks face huge penalties for non-compliance. It can be tough to recover from these penalties and can make future customers question their bank's integrity. If a bank falls victim to cyber threats because of non-compliance, a series of downfalls are likely to follow.
Solutions to improve your cybersecurity efforts
Now that we’ve established the risks of poor cybersecurity and the importance of a strong cyber posture, let’s go over how you can best protect your financial institution from attempted cybercrime.
Your business is only as strong as your weakest link. Making your employees aware of all potential threats and vulnerabilities is the key to preventing them. Make sure employees know how to protect against various pervasive threats, what breach tactics they should be alert to, what to do in case of a breach, and how to properly secure private customer data. Anyone at an organization can fall victim to cybercrime if they’re not trained properly. Educate employees, schedule consistent training, and empower employees to take initiative if they suspect fraudulent activity.
Continuously monitor all systems and audit on a regular basis
Minor vulnerabilities are often the passageway to many cyber attacks. However, continuously monitoring network activity and performing regular cybersecurity audits that search for misconfigured systems, missing security rules, outdated extensions, or development bugs can help uncover these vulnerabilities.
Audits can also help to determine if your network's security system is lagging or slow. This will better inform what aspects of your network need to be updated to stay quick and ahead of future cyber breaches.
Choose the right security solution
Having someone sit and monitor the authenticity of every transaction request is impossible. Banks can switch to a solution that automates the scanning and monitoring process of transactions to filter and block any suspicious traffic from infiltrating your network.
The security screening will act similarly to a TSA security check at an airport and screen everything that goes through; if it notices similar suspicious activity, it will take note of its pattern, prevent it from accessing your network, and as a result will expand its threat knowledge.
How SecurityScorecard can help
Banks act as some of the most prominent consumer-facing businesses across the globe. In order to protect your bank’s reputation and customer data, focus on finding a solution that easily fits into your cybersecurity workflow and aligns with business goals.
SecurityScorecard’s financial services solutions empower organizations to take back control of their cybersecurity. Recognized as the industry standard for financial institutions worldwide, our security ratings form the foundation of risk management for many commercial and investment banks. With continuous monitoring, comprehensive oversight, and visibility into network vulnerabilities, SecurityScorecard uncovers risks and helps you stay ahead of persistent threat attempts.