INDUSTRY TRENDS TO IMPROVE CYBER RESILIENCE
The cybersecurity landscape continues to evolve. Global geopolitical uncertainties, upcoming mid-term elections, and the ongoing pandemic have combined to create a heightened threat environment. And banks and financial institutions have become increasingly attractive targets for cybercriminals using ever more sophisticated methods.
It’s estimated that financial services firms are around 300 times more likely than other companies to be the victims of a cyberattack.* Security incidents in the financial sector are extremely expensive, with the average cost of a data breach reaching $5.72 million in 2021.**
Clearly, the stakes are high – with large amounts of money and valuable data involved, as well as the potential effects on the economy. Not to mention the regulatory issues and associated fines, legal ramifications, and damage to corporate reputation.
Staying Ahead of the Curve
A decade ago, the majority of financial cyberattacks were designed to steal information, such as credit cards, PINs, and passwords. Today, the attacks are more destructive, aimed at crippling businesses and disrupting operations. Last year alone the banking industry experienced an increase of 1,318% in ransomware attacks, according to Security Magazine.
To protect their customers’ assets as well as their own resources from emerging threats, financial companies must improve their cybersecurity posture by staying informed of industry trends and implementing best practices. Let’s look at a few of those.
Addressing Risks in Digital Banking
The coronavirus pandemic has accelerated the banking industry’s digital transformation and completely changed consumer behavior. Consumers are increasingly choosing cashless payment alternatives using digital banking platforms, such as mobile apps and web portals.
These digital solutions create new vulnerabilities, including insecure data storage, insufficient authentication, and direct code tampering. These, in turn, put consumers at risk for exploitation by cybercriminals using techniques such as app-based banking trojans and fake banking apps.
To keep up with consumer and payment trends and avoid major security risks, banks must invest in cybersecurity practices for mobile and web platforms.
Monitoring Third Party Services
By nature, banking is a highly collaborative business. Third-party vendors help financial institutions access expertise or improve efficiency, enabling them to remain competitive in the industry.
Third parties and their cybersecurity practices must be carefully monitored to avoid vulnerabilities which could expose critical infrastructure to threats. The APIs used by banks must also be carefully examined to identify and prevent potential risks associated with third parties.
Using AI for Fraud Prevention
Artificial Intelligence (AI) techniques have been used by major banks for years to detect deviations and anomalies. But AI is now playing a crucial role in customer behavior monitoring for fraud detection and prevention.
It also improves risk management, as AI-powered solutions can analyze data in massive volumes and quickly spot patterns from several channels. This helps predict and prevent credit risks and can also identify malicious acts, such as identity theft and money laundering.
It’s a Business Decision
Making cybersecurity a priority is no longer simply a safety measure tactic for your IT health. It’s now incumbant on banks and financial institutions to make it a critical business initiative. It must be a part of annual business budgeting discussions and overall strategic planning. This is not just the opinion of a few experts. It’s a recommendation from state and federal banking regulatory bodies.
*source: Boston Consulting Group
**source: IBM
