A massive cyberattack has the potential to cause a bank to fail. Almost every financial institution has been the victim of a cyberattack in some way, and the number of attacks is on the rise. According to the Boston Consulting Group, financial businesses are 300 times more likely than other institutions to encounter them.
Financial organizations and the government are concerned about the rising risk of cyberattacks and their possible impact on banks. Here’s how and why banks are at risk, as well as what a cyberattack may mean.
Financial service businesses are no strangers to cyberthreats, especially with so much banking done online. According to the most recent cybersecurity statistics, the recent COVID-19 epidemic is to account for a 238 percent rise in cyberattacks against banks and other financial organizations.
These organizations must be prepared for these attacks and know how to respond fast in order to protect their institutions and customers’ personal information.
While many people conceive of a cybercrime as a one-man operation or a group of crooks out to make money, foreign governments promote and launch some assaults. Because of the rising frequency of such attacks, NATO designated cyberspace as the fifth realm of warfare, emphasizing the importance of a country’s infrastructure to its stability.
To destabilize a country and make citizens worry about their economy, foreign factions may try to attack banks, stock exchanges, and other financial institutions.
Authorities may hire their own hackers to attack the banking industry in other nations in specific cases. In some cases, they may spread false market news in order to impact trade volume.
A phony article was more likely to produce greater market disruption than a true post, according to researchers from the MIT Sloan School of Management and the Yale School of Management. The prior effect of article writers had a substantial impact on aberrant trading behavior.
While some banks say they are over regulated, others believe there are insufficient controls or consumer protection legislation in this period of rapid technological change. Banks must investigate more effective and timely strategies to protect their institutions and clients because regulatory action is frequently short-sighted and reactionary.
Identity and Credential Theft
Account takeover is a particularly serious type of cybersecurity threat to customers, in which a criminal gains access to a customer’s account and then changes information on it so that the account’s true owner has no access to it or receives account updates. Credential stuffing, in which hackers utilize computers to continually insert numerous credentials until they break into an account, is a common cause of this attack.
Because many consumers use the same username and password combinations across different platforms, some thieves go a step further by using that login information to access additional accounts held by the customer. They could even utilize the information acquired to commit identity theft.
Errors by Employees
While banks choose personnel who will not steal from them, employee errors, not purposeful misconduct, pose a significant cybersecurity risk. Employees, for example, may open a phishing email that spreads malware throughout the bank’s network.
In 2016, this was the most common sort of cyberattack. Simple staff errors and technology vulnerabilities may expose financial institutions to further cybersecurity threats, given the COVID-19 epidemic and the fact that many banking personnel work from home.
Manipulation and Data Theft
Criminals make little alterations to data in some types of cyberattacks, which may not be immediately obvious. Employees may not recognize the attack because nothing is stolen at the time. Criminals, on the other hand, can manipulate the system’s algorithms for their own financial gain once they have access to this data.
The use of stolen credentials has been recognized as the number one way hackers utilize to gain unauthorized access to accounts in the last four Verizon Data Breach Investigations Reports. When bank clients or workers click on an email or link, or download an attachment from an email, many of these cyberattacks occur.
The email may indicate that their account has been compromised and that they need to check in with fresh information, which the criminal will then use to gain access to the account, according to the email. This approach might also be used to install malware on a computer system.
Ransomware is a sort of software that takes control of a victim’s computer system by encrypting data and preventing the owner from accessing it unless they pay a huge sum of money. Because the thieves are after significant payments, many of these attacks target banks.
To save money on data storage, several banks store information in the cloud. The banks, however, may still lose crucial data if harmful malware is installed and erases information if these servers are not secure.
customers may be exposed to identity theft and other privacy concerns as a result of a huge data breach caused by unsecure cloud providers.
Even though banks have safe systems, they may be more vulnerable if they rely on third-party contractors to provide specific services. There are more ways for hackers to get into your system if there are more system entry points.
Technology that is complex
Criminals are finding new security flaws and strategies to target financial institutions as technology advances, such as employing AI and IoT to intensify cyberattacks. VMware Carbon Black reported that 82 percent of CIOs polled believe that cyberattack methods are growing more complex.
The report cited social engineering as an example of human frailty being exploited.
Financial Institutions Can Protect Himself From These Cyberthreats in Several Ways
Institutions can protect themselves using the same technology that is used against them, such as:
- Using artificial intelligence to detect risks more rapidly
- Encrypting data to ensure that it is not compromised in the event of a breach.
- Keeping an eye on cloud security
- Access to cloud security is restricted.
- Providing regular updates
- Creating a recovery strategy in the event of an assault
- Instructing workers and consumers to only use a secure place to view bank data.
- Security is frequently updated.
- Increasing IT resource budgets
- Security systems and protocols must be updated.
- The use of multi-factor authentication is a common practice.
- Employees should be trained about cybersecurity dangers.
Preventing an attack can be as simple as implementing the methods outlined above and being aware of potential dangers to your financial institution.