The banking industry is one of the biggest contributors towards the global economy. Between commercial banks, investment banks and a wide range of other financial institutions, the sector controls in excess of $13 trillion. At least, those were the stats back in 2020. And, as you can imagine, security for businesses dealing with those kinds of assets needs to be top-notch and world-class if they want to maintain and grow their reputation.
But with cyberattacks becoming more sophisticated and complex on a daily basis, it is difficult for businesses to recognise and address some of the biggest cybersecurity threats in the banking sector. A bank’s highest security concerns are no longer physical, in the form of bank robbers, but digital, in the forms of email hacking, phishing scams, malware being installed on their systems and even their own humans.
What is Cybersecurity In Banking?
Cybersecurity refers to a collection of technologies, procedures, and methods designed to prevent intrusions such as attacks, damage, malware, viruses, hacking, data theft, and unauthorized access to systems, data, and programs online.
Why it is Important?
When most people think of attacks to banking institutions, they think of the impact it can have on finances – money being stolen, both from the banks themselves and from client accounts. But in reality, there are plenty of areas that banks need to protect against cyber threats.
Protecting Your Reputation
One of the hardest hit areas for banking institutions that experience attacks isn’t financial. At least, not directly. It’s the hit that their reputation takes when word gets out about the attack, and the effects can be disastrous. Customers rush to secure their funds and assets, often leaving banking institutions with both short-term liquidity and long-term financial problems, making it difficult for them to meet their financial obligations.
On top of that risk to the individual bank’s reputation is the reputation for banking institutions in general when an attack occurs. If customers cannot trust the bank that they’ve invested with for decades on end, what makes their competition any more secure. This kind of thinking can lead to larger financial implications for the industry as a whole.
Protecting Your Data
In this modern, digital age, data is an invaluable asset, and banking institutions deal with sensitive data day in and day out. There’s the financial data about their customers’ accounts, investments and transactions. But there’s also personal data such as ID numbers, dates of birth, email addresses and contact numbers. In the wrong hands, this personally identifiable information has the potential to cause further damage to your business and to your clientele.
Ensuring The Privacy of Confidential Information.
While personally identifiable information is certainly one form of confidential information that needs to be protected, it is hardly the only data that you need to ensure the privacy of. Banking institutions need to ensure that the financial data that they deal with on a daily basis is protected, and that their communications are secured from outside interference to protect their clients’ privacy and their own intellectual property.
Maintaining Your Data Integrity
Maintaining complete records of transactions is a critical part of managing data in the finance industry. Incomplete or inaccurate data can be just as much a threat as a cyberattack, and having multiple versions of documents is just as dangerous, since they are more difficult to keep track of and, therefore, to protect. This is why a good deal of cybersecurity in banking is about maintaining your data’s integrity, and limiting access to information to only those who need it.
While damage to your reputation and to your clients’ confidentiality are certainly concerns when it comes to securing your banking institution, there are also legal repercussions that need to be considered when it comes to the protection of the information in your possession. Mishandling or mismanaging personal data can also result in heavy fines in the EU and South Africa, thanks to regulations like GDPR and the POPI Act which govern the management and protection of sensitive information.
Managing Risks To Yourselves And Your Clients
Risk is inevitable in any industry, but especially so in financial institutions. A certain amount of risk is acceptable, but banks and finance businesses should be taking every step that they possibly can to minimise risk, not only for themselves, but for their clients as well.
Putting financial cybersecurity measures in place is not just a recommendation, but a necessity for banking institutions if they want to safeguard their reputation, earn, and maintain the trust of their customers.
What Are The Biggest Threats To Cybersecurity In The Banking Industry?
Understanding the facts about cyber security in the banking sector is important is one matter, but a big part of securing your financial business is understanding the cyber security challenges that you face. Let’s take a look at some of the biggest types of cyber security threats to banking institutions.
1. Phishing Attacks
Plenty of people out there still don’t understand the difference between spam and phishing mails, never mind the difference between phishing, spear phishing and whale phishing. We’ve put together a blog explaining each of these email security threats, but what’s most important to understand is this: Where spam is unsolicited mail, phishing mails specifically aim to harm you as an individual, or your business. They may contain a wide variety of viruses and malicious software (more on that in a bit), could trick you into handing over login credentials on a fake website, or could be a means of social engineering, making you think that you’re communicating with a friend or colleague, when in fact it’s an attacker. Compared to phishing mails, spam is the least of your concerns.
2. Email Breaches & Spoofing
There is a common misconception that phishing mails always come from strangers. That email from your colleague is going to be perfectly safe, so there’s no need to think twice about opening the attachment. But the fact is that attackers have gotten significantly smarter about the way that they scam people. What looks like an email from your colleague – with the right signature and everything! – could be coming from a spoofed address – one that claims to be someone you know, but is in fact a random Gmail address, for example, or from a domain with a slightly different spelling. Social engineering is seeing attackers gaining vast insight into people through social media posts, and using those details to their advantage in spoofing mailboxes and pretending to be someone that you can trust.
And on top of spoofing, there’s the even greater threat of compromised mailboxes. Once an email address has been breached, an attacker has access to a plethora of data and innumerable email addresses, all of which they can use to their advantage, emailing all of your contacts as if they were you. There’s nothing to differentiate these mails from any other mail that you sent – they’ll come from the right address, they’ll have the right signature. They’ll look just like you because they are from ‘you’. Which often leads your colleagues and vendors to trust the mails that get sent, providing attackers with further information, access, and in some cases funds thanks to deposit fraud.
Malware, standing for MAL-icious soft-WARE, is a type of virus that many phishing attackers use. They include it as an attachment to a seemingly legitimate email, or have you download it from a site. Once malware has been downloaded, it allows an attacker access to your systems, which they can use to gain further information like user credentials, infiltrate networks and systems, or even manipulate data.
Data manipulation is an especially dangerous threat, as it means that attackers can make small changes to, for example, the financial information that a bank has for a particular client (or multiple clients) resulting in transactions being directed to their own account, rather than the client’s. This often happens without the bank even realising that a problem has occurred.
While malware is used for a wide range of malicious intentions, ransomware is software used by attackers that have a specific goal in mind – holding your data or your operations ransom.
You could think of this as a good old bank heist, only instead of happening in a physical location, it revolves around your online data, and instead of holding your customers hostage, they are using the security of your data as extortion.
Because most modern businesses rely on data to operate, falling victim to a ransomware attack can have dire consequences, not just in terms of the finances that you have to pay over to retrieve your data (which may not even occur at all, since plenty of attackers destroy the information in their possession after they’ve been paid). A ransomware attack can bring business to a grinding halt, leading to hours spent offline where your clients are unable to retrieve their funds, resulting in a huge hit for a bank’s reputation.
5. Denial Of Service Attacks
Another method that attackers use to disrupt business operations and prevent companies, financial or otherwise, from carrying out business as usual are Denial of Service (DoS) or Distributed Denial of Service (DDoS) attacks. These involve cybercriminals attacking your systems from multiple directions at the same time, spreading your IT team thin on the ground as they try to ensure that there are no vulnerabilities that can be infiltrated. But a DoS attack can also involve attacks sending inordinate amounts of traffic to your site, making it impossible for others to access. This latter scenario is particularly dangerous for banks, since any clients attempting to log into their profiles will see your business as being offline, which will affect your reputation and impact the trust that your clients place in your ability to protect their information and their finances.
6. The Internet Of Things
I don’t know if you’ve noticed, but lately everything has an internet connection. Your TV’s gotten ‘smarter’, your vacuum cleaner is online, your fridge connects to your phone and your laptop, letting you know when you need more milk. The phenomenon may seem like a wonderful convenience, but it is providing more entry points for cyberattackers to infiltrate and manipulate. And sure, you might be saying to yourself that your bank doesn’t use smart TVs or allow for unnecessary devices to connect to the internet. But what about your ATMs? What about Point-of-Sale systems? These need to be secured to protect your finance business too.
7. Insider Threats
Once upon a time, insider threats were almost always intentional. They were people within your business who wanted to cause damage to your operations or your reputation. The reasons behind the attacks varied from disgruntled employees, to competitors, to those who simply wanted to watch the world burn.
But today, insider threats are more often than not employees who have no intention of causing harm. They can simply be employees who aren’t taking the right steps to protect their devices and, in turn, your data and your business. They’re not encrypting sensitive communications, they’re not practicing good cyber hygiene, they’re not running updates or maintaining their apps, software, phones and laptops as they should. And the result is that they’re putting your business at risk.
Interested in learning more about the simple steps you can take to improve your cyber hygiene? We’ve put together a Personal Cyber Hygiene checklist just for you.
8. Third Party Security
It would be one matter if you only had your own business’ cybersecurity to concern yourself with. But every vendor that you use, every service provider and partner, adds a certain amount of risk to cybersecurity in financial services businesses as well. If any one of them has a vulnerability that an attacker takes advantage of, it has the potential to make your finance business vulnerable as well, particularly to threats like compromised email addresses and deposit fraud.
This is why you need to be vigilant and thorough in the vetting of third-party providers. And this includes your IT service provider. You want to ensure that they are not only protecting their own business, but have the expertise and experience that you need to protect your company, implementing the right technologies to suit your needs, and managing them (including their maintenance and updates) in the right way.
What Are The Key Areas Of Cyber Security To Focus On In The Banking Industry?
With so many different types of attacks and threats that need to be accounted for and protected against, it can be difficult to know where to start when putting together a strategy for securing your bank or finance company against cyberthreats.
There are, however, 4 key areas where focusing your security efforts will have the biggest impact:
I cannot emphasise enough the importance of training. And I don’t just mean training your teams, though that is critical as well. When it comes to cyber security in banking, educating your clients is just as important, if not more so. The better informed your customers are, the more careful they will be about putting themselves, and in turn your business, at risk. Regularly remind them about the cyber hygiene steps that they can be taking to protect their devices and their accounts.
And when it comes to your teams, make sure that you are also conducting regular training so that they understand the threats that your business faces, how to recognise them, and how to respond to attacks when they do occur. By ensuring that your teams have a thorough understanding of the best course of action to take for their own protection, and for your company’s security, you are ensuring that your first line of defence is well prepared and ready to protect you.
2. Network Security
Securing your networks is certainly more challenging in this era of remote and hybrid working. Rather than having to protect a single office environment, you need to ensure that your network, and the devices that connect to it, are secure, and that the right access is provided to your humans. This will ensure that they’re able to work efficiently, having the data and files that they need available to them, from wherever they are, but without compromising your bank’s security.
3. Data Security
Most of the threats that banking institutions faced can be broken down into two categories: financial and data driven. Financial threats are nothing new – banks have been facing them practically since their conception. But the threats to the data that banks control are evolving and changing, and finance businesses need to keep up with them to protect themselves. Thankfully, there are data security methods that are both effective and relatively easy to implement, like having a backup and recovery plan which ensures that even if you do experience an attack, criminals cannot hold your information ransom – you can simply restore it from a backup rather than giving into their extortionate demands.
4. Payment And Mobile Security
Banking institutions deal with incoming and outgoing transactions on a minute-to-minute basis, most of which are coming from cellphones and mobile devices. This is why it’s critical that they you have methods in place to secure those payments. These can include processes like two-factor authentication, sending tokens to confirm that transactions are authorised, encrypting financial details to prevent interception, and encouraging your clients to regularly update their apps and their devices to safeguard themselves against software vulnerabilities.
Are There Other Ways That Banking Institutions Can Tighten There Cyber Security ?
Understanding the importance of cybersecurity in banking, and having a good idea of the threats that financial institutions face are two good starting points for protecting your business. But there are other cyber security measures for banks that you can use to tighten your security and minimise the number of gaps in your defences. These cyber security do’s and 10 don’ts will see you going the extra mile to keep your bank or finance business secure.
Learn more about the five most common cybersecurity gaps that businesses face on our blog.
Have A Cyber Security Strategy
One of the biggest assets that a bank, or any business for that matter, can have when it comes to their IT is a cybersecurity strategy.
By putting a strategy in place which looks at your security as a whole, noting vulnerabilities and putting systems and cybersecurity measures in place for dealing with them, you can be better prepared to deal with threats when they arise.
A strategy for cybersecurity in banking can include doing regular IT audits, assigning roles and responsibilities for performing maintenance and updates on your technologies, and putting cyber security documentation in place to address each of the other measures for tightening your security below.
Prepare For Disasters
Disasters happen. When you are unprepared for them, they can be detrimental to your business. Which is why the preparation is so important. Having a plan of action in place for when you are attacked is just as important as having a plan in case of, for example, fire. Whether it’s a natural disaster, a physical disaster, or the disaster of a cyberattack or data breach, ensuring that everyone within your business knows what to do, who to turn to, and where their own responsibilities lie can be the difference between getting through it unscathed, or suffering catastrophic failures.
A Disaster Recovery Plan can help you to ensure that when disaster does strike, your operations don’t grind to a halt. A great recovery plan includes steps that can be taken before, during, and after an attack – for example, having a backup schedule in place, assigning a team member who is responsible for the recovery process if disaster strikes, and a plan for communicating with your clients during and after an attack.
Use Strong Passwords
This applies not just to your business, but to each of your individual employees as well. Password security is essential, especially when it comes to Denial of Service attacks, where multiple attackers may be trying to hack your systems at once.
The best practice for passwords differs slightly depending on who you talk to. Some companies will tell you that it’s better to use a password that is long, but easy to remember, since it means that you won’t forget it or need to change it as often. Others (and Solid Systems is part of this latter camp) will tell you that the more characters, and unique ones at that, you have, the better. When it comes to forgetting what those passwords are, we highly recommend using a secure password manager to keep track of them, since you then only have a single password that you need to remember.
Enforce Multi-Factor Authentication
Even better than having a strong password is Multi-Factor Authentication (MFA). I’ve said it in the past, and I’ll say it again – I will GIVE you my password if I have MFA enabled. It just adds such a thorough layer of protection to your accounts, which is why I recommend that every business implement MFA across all of their team members at the very least, and encourage your clients to use fingerprint scanning to log into their accounts, and tokens or One Time Pins (OTPs) to authorise transactions.
Set Up Alerts
One of the biggest problems with cyberattacks is that businesses don’t realise they’re under attack until it’s too late to do anything about it. By setting up alerts to notify you when there is suspicious activity in your cloud storage, infrastructure, or that someone without the right permissions is trying to access your data, you can ensure that you are the first to know about attempted attacks, and are well prepared to restrict access or stop a threat in its tracks.
Use The Right Software And Keep It Maintained And Up-To-Date
It’s not just your office machines that need to be firewalled, kept updated with the latest anti-virus, Microsoft Defender for Office 365, and regularly patched. Because banking institutions are embracing remote and hybrid working, it’s important that every one of your employees’ machines are thoroughly protected through updates, patches and network security measures like Virtual Private Networks (VPNs) and firewalls wherever possible.
Encrypt Sensitive Information
Encryption may sound complicated, but in reality, it can be as easy as the click of a button. Microsoft Outlook literally has an encryption button to secure emails and ensure that they cannot be accessed by anyone except the intended recipient. VPNs allow you to encrypt any and all data that you are transferring over a network, even if it’s a publicly accessible one. Encrypting information has become a simple process, and one that every employee should be implementing, particularly when dealing with personal or financial data.
Why Having A Managed IT Service Provider Helps
More important than any of the advice that I’ve given in this extensive article so far, is the value that a Managed IT Service Provider can add to your business.
When you have the right IT partner by your side, the weight of the responsibilities and risks that rest with your business in trying to prioritise cybersecurity in banking, become shared. The right IT partner will want to see you growing from strength to strength, helping you to protect your company in all the right ways.
You won’t need to worry about network security and data security and every other security measure and technique that we’ve laid out in this article, because your IT partner will take care of your technology, ensuring your protection, and allowing you to focus your efforts where they matter most – on your business and your goals.
Cybersecurity in banking is a real concern that needs to be addressed by each and every financial institution. But it’s not a journey that you need to go on alone. If you’re ready to see the difference that the right IT partner can make for your business, schedule a demo with Solid Systems and step into the future with confidence.