The banking sector has been under attack for hundreds of years. First, it was the physical theft of monies. Then it was computer fraud. Today, it’s not only cyber fraud but hacks into servers to obtain a customer’s personally identifiable information (PII). Hence, the reason why cyber security in banking is of utmost importance. As individuals and companies perform most transactions online, the risk of a data breach increases daily.
Cyber Security in Banking
Cyber security refers to the organization of technologies, procedures, and methods designed to prevent networks, devices, programs, and data from attack, damage, malware, viruses, hacking, data thefts or unauthorized access. The main objective of Cyber security in banking is to safeguard the user’s assets. As individuals go cashless, further actions or transactions are done online. Individuals use their digital money like debit cards and credit cards for transactions that require to be safeguarded under Cyber security.
Importance of Cyber Security in Banking
Cyber security is not only restricted to IT organizations, it is important for every single business. But, for banks, it holds important value. Banks deal in millions of transactions on a regular basis. Hence, it is very important for banks to take protective security procedures to safeguard their data against cyber-attacks. Here are some reasons why cyber security is essential for banks:
Loss to customers
When a bank confronts a cyber-attack, it not only affects the bank’s status but also causes loss to its customer’s assets. Normally, when a user loses money due to card fraud, it can be retrieved from the bank. But, in circumstances like data infringement, it takes time to retrieve the funds, which is very worrying for customers.
Data infringement is a crucial problem for banks, as it leads to losing users data. If the customers’ data of a bank is breached, then it becomes hard for customers to have confidence in the bank.
As we know, nearly everything has been digitized now. From ordering products to making meetings and sending money, we trust on various digital platforms. This makes it highly important for banks to advance their banking functions utilized by customers, as hackers can swiftly access banking apps if proper cyber security methods are not applied.
The Top Cyber security Threats
Ransomware has been a major headache for organizations around the world for several years now and doesn’t look like stopping any time soon. This is a method of cybercrime where files are encrypted and users are locked out, with the criminals demanding money to re-access the system. Organizations affected by ransomware attacks can find their systems crippled for extended periods of time, particularly if they don’t have backups.
Phishing means to get confidential, classified data such as credit, debit card details etc. for malicious actions by hiding as a reliable person in electronic interaction. Online banking phishing scams have advanced constantly. They seem real and genuine, but they trick you into providing away your access data.
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Cloud-based cyber attacks
As more software systems and data are stored in the cloud, cyber criminals have seized upon this and as a result an increase in cloud-based attacks has been one of the most prevalent cyber threats to the banking industry. Banks need to ensure that the cloud infrastructure is configured securely to protect from harmful breaches.
One of the biggest threats to banking and finance is social engineering. People are often the most vulnerable link in the security chain- they can be tricked into giving over sensitive details and credentials. This can equally affect a bank’s employees or its customers.
Supply chain attacks
An increasingly popular method of malware distribution by cyber criminals is to target a software vendor and then deliver malicious code to customers and others in the supply chain in the form of products or updates that on the surface appear to be legitimate. These attacks compromise the distribution systems and enable the cyber criminals to enter the supplier’s customers’ networks.
This is one of the latest forms of cyber threats faced by financial institutions. The hackers will pose as a bank website’s URL with a website that is related to the original one and works the same way and when the customer enters his or her login records that login credentials are robbed by these hackers and they use it later.
A widespread misunderstanding about cyber-attacks is that they are only worried about data stealing. This is not always the case, however, as data manipulation attacks have gradually become a more common means of attack for hackers. Data manipulation attacks take place when a dangerous actor gains entry to an objective system and creates unnoticed changes to data for their own individual gain.
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Key Measures to Stop Cyber-attacks
The financial sector is without doubt one of the most vulnerable sectors when it comes to cyber-attacks, and such attacks have kept on increasing year or year. Some of the key measures that can be adopted to prevent such crimes include:
- Implementing strong corporate policies that ensure proper protection of customer data.
- Ensuring employee safety regulations and implementing proper checks, including user account verification, user login monitoring and password security to bring in accountability.
- Assigning a separate user to each staff and prohibiting the exchange of secure information.
- Prohibiting employees from downloading and implementing any unauthorized software.
- Ensuring proper approval protocols are implement, with at least two approval requirements for wire transfers or clearance transfers and others.
- Increasing tech support ensuring proper firewall protection for all devices. This would block contacts from any unauthorized domains.
- Employee training: needless to say, at the end of the day, the processes are to be followed by the general employees of the bank, and therefore continuous training focused on improving the know-how and possible legal implications are vital.
Cyber Security in Bangladesh
A number of both local public and private banks currently risk cyber-attacks mainly for their indifference and fragile cyber-security systems, prompting experts to suggest immediate action. Stakeholders and experts said that a large percentage of banks were not taking enough precautionary measures to fend off the possible attacks, and avert bigger financial loss, which they deemed imminent.
In June 2022, the Bangladesh Institute of Bank Management (BIBM) conducted a study based on the situation of the banking sector as of 2020 which found nearly 52% of banks at grave risk of cyber- attacks. In April 2020, the Financial Stability Board (FSB) warned that “a major cyber incident, if not properly contained, could seriously disrupt financial systems, including critical financial infrastructure, leading to broader financial stability implications.”
The financial institutions (FIs), particularly banks, are most desirable target to cyber criminals. The state-run Bangladesh e-Government Computer Incident Response Team (BGD e- Gov CIRT) made a shocking disclosure, that about 99% of both private and public banks suffered major cyber-attacks.
The report, titled “Sectoral Cyber Threat Intelligence for Banking Industries,” also identified that most users of banking applications and portals (both internal and external) were not properly aware of cyber- hygiene. In 75% cases, credential stealing is possible due to insecure uses of mobile or computing devices. Nearly 70% of the attacks on financial “institutions targeted banks, Research by IBM X-Force says, adding that some 16% targeted insurance companies while 14% targeted other financial institutions in 2021.
Cyber security in banking is something that cannot be negotiated with. With the progress in digitalization in the financial industry, it has become more inclined to hackers. Hence, there needs to be foolproof cyber security, that doesn’t negotiate with the security of user’s and bank’s data and money.