Cybersecurity in Banking: Importance, Threats, Challenges

cybersecurity

 

The banking sector is one of the most lucrative targets for cybercriminals due to the vast amounts of personal and financial information available in the systems and databases of financial organizations such as Banks. This is the reason why banks must have strong cybersecurity measures in place to protect their customers from data breaches, identity theft, phishing attacks, malicious software, and other forms of cybercrime.

Cybersecurity in banking is an ever-evolving field that focuses on protecting customer data from potential cyberattacks. It involves the use of advanced technologies such as encryption, authentication, and access control to ensure that customer information is kept secure.

Banks must also implement processes for securely storing and transmitting confidential customer data, including sensitive personal information. Banks are responsible for implementing risk management strategies to mitigate the threats posed by cybercriminals. This includes monitoring network traffic and responding to malicious activity quickly.

In addition, banks must maintain compliance with industry regulations regarding the handling of customer data. Cybersecurity measures help protect customers’ assets and financial information while providing a safe environment for conducting their banking activities. By investing in these measures, banks can reduce their exposure to risks.

Between June 2018 and March 2022, Indian banks reported 248 successful data breaches by hackers and cybercriminals; the government notified Parliament on Aug 2, 2022. The Indian government has reported 11,60,000 cyber-attacks in 2022. The number is estimated to be three times more than in 2019.

Types of cyber threats

  • Large-scale anti-fraud bypass:

The first step involves taking the data of the businesses from their already installed ERP platforms, supply chain software, and EDI, which includes purchase orders, invoices, shipping details, payment information, and others.

  • ATM malware:

This type of malware is typically programmed to target specific bank accounts and harvest their information, which can then be used for fraudulent activities such as withdrawing funds from the account or making unauthorized transactions

  • Account-centric frauds:

Account-centric frauds are one of the most common types of cyber-attacks, targeting sensitive data such as usernames, passwords, OTPs (one-time passwords), etc

  • Phishing:

One of the most frequent problems with cybersecurity in the banking sector is phishing assaults. They can be used to enter a bank's network and conduct a more severe attack like APT, which can have a disastrous effect on those organizations (Advanced Persistent Threat). Phishing is often used to steal user data, including login credentials, etc.

  • Identity theft:

When a data breach occurs, the data of the customers are sold by cybercriminals to use to get credit information without their consent to borrow money and conduct purchase violations.

  • Threat from employees:

Unhappy or dissatisfied employees contribute to the large scale of the risk, by breaching the companies’ policies and causing security threats to the organizations.

  • Ransomware:

These ransomware attacks will mainly hit small banks as they lack better IT resources, outdated security tech, and protocols on cybersecurity. Since 90% of banking institutions have faced ransomware in the past year, it poses a severe threat to them.

  • Unencrypted Data:

This is a very basic yet crucial part of good cybersecurity. If data is left unencrypted, hackers can use the data right away, creating serious problems for your bank or any other financial institution.

  • Trojans:

The term "Trojan" is used to designate several dangerous tactics hackers use to cheat their way into the secure data system. Until it is installed on a computer, a Banker Trojan looks like trustworthy software. However, it is a malicious computer application created to access private data processed or kept by online banking systems. This kind of computer program has a backdoor that enables access to a computer from the outside. Around the globe, there were roughly 54,000 installation packages for mobile banking trojans in the first quarter of 2022.

  • Spoofing:

Hackers use a clone site in this type of cyberattack. By posing as a financial website, they.

  • Design a layout that resembles the original one in both appearance and functionality.
  • Establish a domain with a modest modification in spelling or domain extension.
  • The user can access this duplicate website via a third-party messaging service, such as text or email. Hackers can access a user's login information when the person is not paying attention.

Seamless multi-factor authentication can solve a lot of these issues. The Reserve Bank of India (RBI) reported bank frauds of 604 billion Indian rupees in 2022.

If you are looking to implement Cyber Security in Banks, it is important to partner with a reputable and experienced provider. Please reach us for further queries