Cybersecurity has become an incredibly acute issue in recent years due to the rise and evolution of cyber threats. In light of this, financial institutions have become among the primary targets for hackers due to the processing and management of sensitive financial data. Here are the five cybersecurity threats affecting banking in 2022.
Therefore, financial organizations must constantly rethink and adjust their cybersecurity strategy to prevent and mitigate possible threats. So what are the top cyber threats to the bank in 2022, and how do you protect the system from them?
Cybersecurity in banking: an overview
Cybersecurity is a set of technologies, procedures, and methods that help protect networks and software products from malicious attacks and unauthorized access. The main goal of cybersecurity in banking is to ensure the confidentiality of information, data integrity, and access to it by authorized users only.
As people move to cashless and digital money, most transactions now take place online, giving cybercriminals an advantage. According to Cybersecurity Ventures, global spending on cybercrime is expected to grow 15% per year and reach $10.5 trillion by 2025, up from $6 trillion in 2021. In other words, a data breach for a bank is a financial loss, a decline in customer confidence, and a blow to the bank’s reputation.
Cybersecurity challenges that banks face
The advancement of technology leads to the development of new forms of cyber threats. Therefore, financial institutions face many financial challenges in terms of cybersecurity. The biggest challenges that most banks face these days are:
- Uninformed employees: employees who are not properly trained on the latest risks and threats are the “weak link” to breaking into the bank’s system.
- Weak security: banks that do not keep up with technological advances or do not update security promptly are more susceptible to cyber threats.
- Technological development: due to the digital transformation caused by the Covid 19 pandemic, financial institutions have embraced new technologies such as cloud computing and artificial intelligence (AI), increasing the probability of cyber threats.
- Hybrid workplace: changes in work practices due to COVID-19, such as the hybrid workspace that combines office-based and remote workers, have increased the risk of threats to organizations.
Top 5 cyber threats that modern banks battle these days
Below we will focus on the main cyber threats that any financial institution should be aware of. Even though these threats are not specific to the financial industry, they are the most common forms of cyber threats and can cause damage if not handled properly.
Ransomware
Ransomware has been a headache for banks for years and doesn’t seem to be going away anytime soon. According to Palo Alto Networks’ Unit 42, in 2021, the average ransomware payment increased 82% over the last year to $570,000.
Ransomware is a type of malware designed to deny a user or organization access to files on their computer. Cybercriminals encrypt files and demand a ransom to decrypt them, putting banks in a position where paying the ransom is an easier and cheaper way to regain access to files.
The time it takes to recover an organization’s data depends on the extent of the damage, the effectiveness of the disaster recovery plan, and the response time to an attack. Without a good disaster recovery plan, banks can be left offline for days at a time, seriously impacting revenues.
Supply chain attacks
A supply chain attack damages an organization through a trusted relationship with an external party (software vendor or developer). Attacks on the software supply chain target less secure elements of the supply chain. It could be anything from the software vendor’s code base to its customer’s network to actual equipment. The goal of the chain attack is to wreak havoc, demand ransom, or compromise secure accounts, but the path is more confusing (and hard to detect). Here are some types of supply chain attacks to watch out for
- Stolen code-signing certificates or malicious applications using the developer’s identifier.
- Specialized code loaded into hardware or software components.
- Malware installed on devices (cameras, USB, phones.)
A supply chain attack allows cybercriminals to bypass security controls by creating pathways to sensitive resources through a third-party target provider. And because third-party vendors store sensitive data about all of their customers, a single hack can affect hundreds of financial organizations.
Phishing
According to the Proofpoint State of the Phish Report 2021, nearly 80% of organizations fell victim to phishing attacks. A phishing attack aims to steal personal or business information used to conduct financial transactions. Phishing involves sending an email disguised as a message from a bank or financial transaction company. After clicking on the malicious link, malware is installed on the device, and the criminal gains access to personal information.
Cybercriminals continue to hone their skills in conducting phishing attacks and creating new types of phishing scams. Some common types of phishing attacks include:
- Email phishing;
- Whale phishing: attacks that target senior company executives;
- Smishing: attacks that use cell phones as an attack platform;
- Angler phishing: attacks that target social network users and others.
As phishing emails become harder for companies to detect, they are one of the most effective cybercriminal attacks in the financial industry.
Distributed Denial-of-Service (DDoS) attacks
Distributed denial of service (DDoS) is a type of attack that disrupts server or network traffic and affects the download speed of an organization’s website. Unlike other types of cyber attacks, a DDoS attack does not compromise the safety of company data. A DDoS attack aims to make your site and servers inaccessible to legitimate users and use the attack as a disguise for other malicious activities.
A good example is driving in traffic: you are driving on the highway, and more and more cars are pulling into the road. Eventually, traffic slows down. That is how a DDoS attack works. Cybercriminals flood the network with so much traffic that it can’t work or exchange data normally. Here are a few more symptoms of a DDoS attack:
- Low network performance;
- Inability to access the website;
- Internet connection down;
- Long denial of access to the network or any Internet services.
According to NETSCOUT, cybercriminals carried out about 4.4 million denial-of-service (DDoS) attacks in 2021, causing significant financial losses for banks.
Bank Drops
“Bank-drops” are fake bank accounts opened using stolen customer credentials, where criminals store stolen funds. Fraudsters access users’ personal and business data on the dark web. The dark web is content that requires special software to access, where people sell illegal goods/services by paying with anonymous cryptocurrency.
Fraudsters use stolen credentials or “full” to open an account and order a card for it. The account must appear as legitimate as possible to keep the fraudster’s activity off the radar of the bank and authorities. Then fraudsters use someone else’s account to transfer misappropriated funds or cash out money.
How to defend against cyber banking threats
The growing risk of cyberattacks and their potential impact on banks is a major concern for financial institutions and governments. Without well-planned and implemented cybersecurity measures, companies are at risk of being compromised in the event of a successful cyberattack. As threats evolve and change faster than banks can keep up. Here’s a list of specific actions banks can take to protect against cyberattacks:
- Employ multi-factor authentication (MFA): a multi-factor authentication can make security breaches difficult and prevent personal credentials from being compromised;
- Use official software: research and invest in a firewall, anti-virus software, anti-malware software, and hardware defense to create a reliable infrastructure against cyber criminals;
- Encrypt data: using strong and secure encryption, data is protected from intruders;
- Disaster recovery plan: having a well-designed and implemented disaster recovery plan helps avoid data loss and minimize business downtime in the event of a breach;
- Conduct regular cyber risk assessments: conduct regular cyber risk assessments: update and patch your software regularly to make sure you are perfectly protected.
Cybersecurity in banking cannot be put at risk. There is no one-size-fits-all cybersecurity strategy. However, security controls based on continuous analysis and security updates can prepare financial institutions to deal with emerging threats.
Image Credit: by Aukid Phumsirichat; Pexels; Thank you!
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