How Banking Sector is using Cyber Security to protect your data
by Piyush Jain
The revolution in technology is increasing rapidly. Along with that, there has been a reported increase in cyber attacks. Hackers are using different ways to hack and steal the data. Cyberattacks have affected businesses that use technology for conducting their daily business. The banking sector has always been the center of attraction for thieves, firstly it was physical stealing and now it is computer fraud. The banks are rapidly adopting new technologies and digital platforms intending to increase their revenues and customers. The fast-growing technology has also changed the customer's preferences. Cybersecurity is of great importance in the financial sector because of increased cyber threats and attacks into the bank servers.
The importance of cybersecurity to the banking sector:
Here are a few points that describe why cybersecurity is important for financial institutes:
Consumers can lose time and money
When a bank's data is hacked or stolen, the customers are most affected since they lose personal data, time and money. It will consume time for the bank to fully or partially recover fraudulently spent money. The bank customers have to cancel the cards, check their statements, and keep their eyes open for complications in case data is breached.
Bank can lose its reputation
If the data of the financial institution is breached because of weak cybersecurity strategy. It can cause serious issues to the bank as they can lose public trust, as well as causes customer insecurity. It is the responsibility of the financial institutions to communicate about cybersecurity with the customers. They should educate them about the measures that can be taken to prevent and protect their data from cyberattacks.
Banks can incur penalties for FDIC non-compliance
Breach of data in the banks can lead to the imposing of the penalties. The penalties for noncompliance can be unexpected for the banks. There will be increased surveillance on the bank transactions and working along with the financial penalties. The FDIC set the compliance standards for the financial institutions. The compliance standards encourage the banks to focus on cybersecurity strategies. When a bank complies with the standards, it ensures that it has made strategies to protect the customer's data.
Breached Data is sensitive
If the financial institution is attacked by the hacker, then the sensitive data of the customers is breached. It is difficult for the customers to stay calm as they know that the information is in the wrong hands and can be used for fraudulent purposes. After taking the necessary steps to minimize the risk, such as canceling the cards, monitoring transactions, and others, they can not sleep at night. It is also the reason that cybersecurity is important for banks and financial institutions.
Biggest threats to Financial institutions:
It is a basic but crucial part of cybersecurity. There should be strong data security in the banking and financial industries due to the sensitive and private data of the customers. All the data such as name, address, income, credit score, collection history, and family member PII and Non-public Personal Information (NPI) need to be encrypted to prevent unauthorized access. If the data is stolen or hacked, then it can not be used immediately to create serious problems for the financial institutions.
It can be said as a new cybersecurity thread. In spoofing the hackers creates a website that looks and functions very similar to the bank's website in an intention to fraud. When a user login the website with his/her information, then that data is stolen by the hackers. They can hack the target users who are using the URL because in the new technique the URL is similar to the bank websites.
It is sometimes found that hackers do not always steal data instead they change it. These types of damages are difficult to trace and identify because the altered data looks similar to the unaltered data. Identifying the manipulation can be a challenging task for the financial institutions if they have been attacked in this manner. The data manipulation can result in big losses to the financial institutions.
More risks from mobile banking apps
With evolving technology, financial institutions are also getting digitized. To help their customers, they have also launched mobile banking apps. More individuals are using these apps to access their bank accounts.Every time the customers use smartphones to access the data there is a risk to banks' cybersecurity. They might be having malicious software installed in phones and the sensitive data passes through this connection. Several people use these apps with minimal or no security, and this makes the potential of attack much greater. Hence, banking software solutions are required to minimize and prevent malicious activity.
Key Components of Bank Security:
Multi-layered email strategy
To protect the sensitive data of the customers, the financial institutions have implemented a multi-layered email strategy. Emails are the common gateway that is used by hackers to access the data. So, they have developed a multi-layer defence that includes Sender Policy Framework (SPF), DomainKeys Identified Email (DKIM), and Domain-based Message Reporting and Conformance (DMARC). The combination of these protocols has minimized the risk and attacks of the hacker on the financial institutions.
Maintain up-to-date virus security software
Information security is constantly evolving with increasing threads. The sensitive data can be easily hacked as soon as the vulnerabilities get patched or a virus is identified and stopped. The hackers look for new ways to hack the systems and steal the data. The banks and financial institutions should work on boosting security to prevent and ensure that their customers information is protected. The financial institutions should timely update their virus security software and use other security tools.
Fraud protection software
Fraud protection software not only supplements your antivirus program but also protects you against fraud. The financial institutions such as Bank of America and Woodforest National Bank are using Fraud protection software like Trusteer. They also made it available as a free download. The software works in the background and updates you if there is any cyber threat to your bank website, phishing, and keylogging schemes. In the case of Trustee, you don't have to think about the threat because it automatically updates and takes action. You can also check some fraud protection software here.
It is another version of multi factor authentication that is more secure than the pincode and pattern security system. This form of security system provides the customers access to their data after scanning and recognizing the retina, thumbprints, or facial recognition. This type of security is difficult to be hacked because the hackers tried to hack and access this type of systems in the past.
A digital certificate validates or authenticates your website. It is also known as a Secure Sockets Layer. The process of obtaining the certificate is called “third-party validation” or “third-party verification” because it is applied by the outside companies. The companies that provide such certificates are Entrust and Verisign. TD Bank, for example, uses a certificate type called Transport Layer Security. The bank websites such as the Bank of America and others that are digitally certified display the bank name in green shading in your browser’s address bar. This green shading indicates that the bank site uses a third-party Validation.
Possession of a huge amount of customer data and valuable assets have made banks the top target of hackers and the threat of financial losses. Therefore banks have been at the forefront of enterprise cybersecurity. In 2020, banks will address the customer demands using different channels, such as web, mobile, and IoT, each channel will generate new vulnerabilities. It is expected that the top three trends that are likely to play a big role in 2020’s banking security headlines are, first, mobile apps and web portals will create more security risks. Second, third-parties will continue to be a target, and third, cryptocurrency hacks will keep big banks on their toes. Thus, It is crucial for the banking industry in 2020 to adopt the latest technology-driven security measures to be able to combat cybersecurity threats.
About the Author
Piyush Jain is the founder and CEO of Simpalm, a mobile app development company in the USA. Piyush founded Simpalm in 2009 and has grown it to be a leading mobile and web development company in the DMV area. With a Ph.D. from Johns Hopkins and a strong background in technology and entrepreneurship, he understands how to solve problems using technology. Under his leadership, Simpalm has delivered 300+ mobile apps and web solutions to clients in startups, enterprises and the federal sector.