Like all other industries, banking has been gradually embracing technology in recent years. Since practically any transaction may be conducted online using a bank’s application or website, data security in the banking business has become a crucial concern. As the cyber threat scenario grows, banks must have a strong cybersecurity culture in response to data breaches and cyberattacks.

As our economy shifts to a digital one, cybersecurity in banking is starting to get real attention. Because of the increased digital connectivity of the world, fraudsters now have more entry points, making cybersecurity in digital banking imperative. Thus, it is critical to take preventative measures while dealing with cybersecurity risks. 

This article takes a look at what exactly cybersecurity in the banking sector is and what types of cyber threats are faced by banks. 

What is Cybersecurity in the Banking Sector?

Protecting against risks, potential harm, computer viruses, malware, hacking, information theft, and unauthorized access to networks, applications, computers, and documentation is the goal of the ’cybersecurity’ system, guidelines, and approaches.

Human error is the root cause of 74% of cybersecurity breaches. People execute transactions using digital payment methods such as bank cards and internet apps, which need to be secure. Also, as more people give up using cash, more money transactions are happening online. Thus, safeguarding such user data & assets becomes the primary goal of cybersecurity in the banking industry. 

The following three points highlight the importance of cybersecurity in the banking sector:

• Mediocre data management and potential breaches can easily force the customer to change their banks.
• Your confidential information could be misused and lead to serious consequences. Even if the cards are canceled and the fraud is quickly resolved, your sensitive data is already jeopardized. 
• Many are turning to digital payment methods like debit and credit cards and going completely cashless. In this situation, it is crucial to make sure that the necessary cybersecurity measures are in place.

Knowing the importance of cybersecurity, let’s talk about some of the frequent threats faced by banks.

Types of Cyber Threats Faced by Banks

The different types of cyber threats faced by banks are as follows:

1. Phishing

Phishing attacks continue to be a major danger to the banking industry and are a popular tactic used by cybercriminals in today’s online environment. 

Phishing attacks in the banking industry can target employees as well as customers. Consumers may get emails, calls, and even messages from attackers posing as bank representatives, which is a handy trick to steal financial information. Employees also need to be alert for phishing attempts that aim to get login credentials to access customer data.

2. Software Supply Chain Cyber Attacks

Targeting a software manufacturer and then distributing malicious code to clients through their distribution channels is a common technique for spreading malware. Attackers use updates or items that seem authentic to spread throughout the supply chain. These attacks put the distribution systems at risk, provide attackers access to the supplier’s networks, and allow them to stay on the systems for a considerable amount of time.

The strongest defense against supply chain assaults is proactive vulnerability testing and client education about how upgrades could provide hackers access to personal data.

3. Malware and Ransomware

Over the past few years, ransomware and malware attacks have emerged as two of the most significant dangers. Not only do financial services face a threat, but most businesses are also susceptible to ransomware and virus attacks. These damaging cyber assaults are getting more sophisticated with each advancement in technology.

To protect themselves from these sophisticated attacks and to reduce security weaknesses, organizations employ more contemporary cybersecurity strategies. As a first line of defense against these pervasive attacks, cybersecurity capabilities like behavioral analysis, artificial intelligence, and machine learning are becoming more commonplace. Bank cybersecurity needs to keep up with the latest attacks and avoid data breaches that could harm their brand.

4. Spoofing

Spoofing is similar to phishing but usually more complex. There are several types of spoofing attacks, all of which involve some form of impersonation. The term “spoofing” describes a variety of dishonest tactics used by con artists to impersonate a reputable person or company using phone numbers, email addresses, or URLs. Domain spoofing is the activity of creating a phony domain name to trick users into disclosing login passwords and other personal information.

Due to its ability to filter out and stop packets containing inconsistent source address information, packet filtering can help prevent IP spoofing attacks. You can further secure your environment by using cryptographic network protocols like Secure Shell (SSH) and HTTP Secure (HTTPS).

5. Fraud and Identity Theft

Identity theft and fraud have always existed. Even though financial institutions are not immune to these attacks, they are becoming more widespread through digital means. These days, fraud and identity theft can be carried out via many cyberattack avenues, and digital strategies might make detection more challenging.

To combat these cyberattacks, digital banking institutions need to put cybersecurity procedures in place that actively look for unusual account activity. Some of these procedures include updating passwords regularly, risk training, and security awareness training among the employees. 

6. Social Engineering

Phishing and social engineering are closely related. However, they may have distinct goals, and social engineering may also entail whaling attacks. Clients and staff are frequently the weakest links in the security chain since they might be duped into divulging private information and login passwords.

Social engineering can take many different forms. It can involve sending phony invoices that appear to be from a reliable source, phishing, or whaling assaults. Thus, it is critical to educate your staff on social engineering techniques and the ongoing evolution of these dangers.

Despite becoming aware of these threats and ways to curb them, there are still some challenges that banks face while implementing cybersecurity. Let’s look at these in detail.

Challenges Relating to Cybersecurity in Digital Banking

Some of the below-listed factors have posed a serious challenge to cybersecurity in digital banking:

1. Lack of awareness

Most people don’t know much about cybersecurity, and not many companies have invested in increasing public awareness of the issue.

2. Inadequate budgets and a lack of management

Due to its low priority, cybersecurity is frequently overlooked when allocating funds. Cybersecurity continues to receive little attention from top management, and projects about it are not given high priority. People may underestimate the seriousness of these risks, which can become challenging to overcome.

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3. Weak identity and access management

Identity and access management has always been a cornerstone of cybersecurity, particularly in these days when hackers are more creative and can access the enterprise’s network with just one compromised credential. Though there has been some progress in this direction, much work still has to be done in this area.

4. Trojans

Banking trojans are malicious programs that are made to obtain sensitive data, like online banking credentials, from compromised computers. A banking trojan can take your login credentials, carry out unauthorized activities, or take money out of your account and deposit it into the attacker’s account.

Ending Note

When it comes to defending banks against cyberattacks, cybersecurity is crucial. Digital banking security is something that cannot be jeopardized. In today’s digital banking landscape, financial institutions must continue to be at the forefront of cybersecurity advancements. 

The financial sector has been increasingly digitized, making it more vulnerable to cyberattacks from criminals. Because of this, there must be unbreakable cybersecurity that doesn’t compromise the security of client and financial institution data and assets. 

Author’s Bio:

Harikrishna Kundariya is the Co-founder, Director, & Marketer of eSparkBiz Technologies – an excellent Software Development Company. Also, a notable IoT, ChatBot & Blockchain-savvy Developer.