Cyber security

Threats and Importance of Cyber Security in banking

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What is Cyber security in banking? 

Protecting critical systems and sensitive data from digital attacks is known as cyber security in Banking. Cybersecurity measures, also known as information technology (IT) security, combat threats to networked systems and applications, whether from within or outside of an organization. Cyber security in banking plays a major role in current scenerio.

What role does cyber security play in banking?

The primary goal of cybersecurity in digital banking is to safeguard customers’ assets. As more people go cashless, more activities and transactions occur online. In addition, people use digital money, such as credit and debit cards, to conduct transactions that must be protected by cybersecurity.

Customers are not the only ones affected by cybercrime in digital banking; banks are also affected as they try to recover data. The banks may have to spend a significant amount of money to recover the data or information.

A significant data breach may make it challenging to trust financial institutions, so cybersecurity is essential for banks. Banks may face severe difficulties as a result of this. Cybersecurity in digital banking ensures the safety and security of your sensitive data.

Cybersecurity Threats in Digital Banking

Your sensitive data may be at risk if you don’t have a strong Cybersecurity strategy. This section will cover the most severe security threats to bank cybersecurity.

Top Cyber security Threats Faced by Banks

Cybercrime has become so common in the banking sector over the last few years that it is now considered one of the industry’s most significant risks. Hackers have advanced in technology and improved their skills, making it extremely difficult for any banking sector to eliminate the threat. Here are some of the cyber security threats that banks face.

Phishing

Phishing is obtaining confidential or classified information, such as credit or debit card numbers, for malicious purposes by impersonating a trustworthy person in electronic interaction. For example, phishing scams involving online banking have evolved. They appear genuine, but they attempt to dupe you into handing over your login credentials.

Malware

End-to-end customer appliances such as computers and mobile devices must be protected, as they are frequently used to conduct digital transactions. If it’s the transactions are linked to malware, they could severely threaten the bank’s cyber security whenever they connect to your network. In addition, confidential data passes through this network, and if a user device is infected with malware, that malware can pose a severe threat to the bank’s network if it is not protected.

Unencrypted Data

It is one of the most common threats faced by banks, in which data is left unencrypted and cyber attackers or hackers immediately manipulate it, causing severe problems for the banks. All data stored on bank computers or the internet should be fully encrypted. It will ensure that even if the data is stolen, hackers cannot use it.

Spoofing

Spoofing is one of the most recent cyber threats financial institutions have faced. The hackers will impersonate a bank website’s URL with a website similar to the original and similar functions. Then, when the customer enters their login credentials, the hackers will steal those credentials and use them later.

Data Manipulation

A common misconception about cyber attacks is that they are only concerned with data theft. Data manipulation attacks have gradually become more common for hackers, but this isn’t always the case. When a dangerous actor gains access to an objective system and makes unnoticed changes to data for their gain, this is known as a data manipulation attack. If a worker modifies customer information data, for example, this will most likely go undetected because the transactions will appear legitimate, resulting in data storage errors in the future. The longer the manipulation is allowed to go unnoticed, the more havoc it will wreak.

How can Banking Institutions Become More Cyber-Secure?

The primary goal of cyber security in banking is to protect the data and assets of customers. As more people go cashless, online banking transactions are becoming more common. Here are some suggestions for making banking institutions more secure online:

Combined Security

Banks invest time, money, and effort into implementing the most cutting-edge technology, which can be challenging to manage all at once Bbecause the BFSI industry is so structured. As a result, it is more advantageous to move toward unified security, where all elements work together and communicate together.

Multi-factor authentication

Multi-factor authentication (MFA) is a security method in which a customer’s access is granted only after providing two login credentials. Password OTPs[?], and fingerprints can be used as login credentials. Ensure login credentials are not from the same source (two passwords) when implementing MFA. MFA is a requirement for banks because it adds an extra layer of security when accessing sensitive information.

Cyber insurance

Cyber insurance ensures that an organization’s financial security is protected during a cyberattack, making it a critical component of a cyber security strategy. In addition to containing legal costs, cyber insurance brokers also notify customers of infringements, ensuring that businesses comply with data breach regulations. Furthermore, cyber insurance will assist in the repair and rebuilding of damaged systems and data.

Consumer Awareness

It is one of the most important aspects where the user must be aware of the importance of not disclosing their credentials to anyone. However, they should notify the cyber security cell immediately if there are any suspicious developments in their operations or bank accounts.

Antivirus and Anti-malware Applications

Although a firewall can improve security, it cannot prevent an attack unless updated anti-virus and anti-malware software is used. Updating to the most recent version of an application can protect your system from potentially devastating attacks.

Importance of Cyber security in Banking

Cyber security is not only crucial for IT companies; it is also essential for every business. However, it is a precious bank. 

Daily, Banks handle millions of transactions daily. As a result, banks must implement protective security procedures to protect their data from cyber-attacks. The following are some of the reasons why cyber security is critical for banks.

Loss to Customers

When a cyber-attack hits a bank, it not only affects the bank’s reputation but also results in the loss of assets belonging to its customers. For example, when a customer loses money due to card fraud usually recovers the money from the bank. However, retrieving funds takes time in situations such as data theft, which is very concerning for customers. Therefore,  all banks must implement cyber security methods to protect their customers’ data and keep it safe.

Bank’s Reputation

Data theft is a significant issue for banks because it results in the loss of personal information. When a bank’s customers’ data is compromised, it becomes difficult for customers to trust the bank. The majority of data breaches occur as a result of inadequate cyber security measures.

Digitization

Almost everything has now been digitized, as we all know. As a result, we depend on multiple digital platforms, from ordering products to scheduling meetings and sending money. This makes it critical for banks to advance their customer-facing banking functions, as hackers can quickly access banking apps if proper cyber security measures are not implemented.

Cases of Attack in Cyber security in Banking

Cybercriminals have devised new methods for attacking and stealing data as the world becomes more digital.

Organized criminals and hackers have been relentless in their attacks on banks. In a recent case involving Canara Bank, a cyber attacker attacked and vandalized the bank’s website by inserting a malicious page and blocking the bank’s e-payments.

Another cyber security attack in India’s banking sector occurred with the Union Bank of India, which suffered a significant loss. The hackers gained access to the system by impersonating an RBI employee. One of the bank’s employees fell for the phishing email and clicked on a malicious link, allowing the malware to take control of the system.

Conclusion

Cybersecurity in bank is an issue that must be addressed. The banking industry has become more vulnerable to cybercriminal attacks as digitalization has increased. As a result, a foolproof Cybersecurity system is required that does not jeopardize the security of data and funds that belong to customers and financial institutions.

Frequently Asked Questions

How can banks improve cyber security?

Banks and other financial institutions can maintain control over data protection no matter where it is stored by encryption. Encrypted data is secure in transit, on the network, and even in the cloud. In addition, encrypted data is still safe from cyber criminals even if system security fails.

Who provides cybersecurity for banks?

Among critical industries in the United States, banks have the highest level of security and the most stringent regulatory requirements. The ABA's expertise and resources help ensure that your bank is aware of the risk environment and has the appropriate plans to detect and prevent cyber incidents.

What is the main threat to banking?

Social engineering is one of the most severe threats to banking and finance. People are frequently the weakest link in the security chain, as they can be duped into divulging sensitive information and credentials. This can have an impact on both employees and customers of a bank.

How do banks secure their data?

Identifying and filling training gaps and encouraging employees to practice digital hygiene. Assuring that employees receive secure software updates regularly.

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