Digital Banking - Case Study
Banks are taking revolutionary approaches to digitize and streamline the customer experience - but these measures could come with a cost without strategic cybersecurity measures.
The world is changing, and the banking industry is evolving too. Modern banking is all about the “digital experience” and moving faster - so we call it “Digital Banking.” With this modernized banking, banks and financial institutions are under constant threat from a wide range of cyber attacks. These attacks can lead to catastrophic consequences for the financial institution and its customers, resulting in financial loss, reputational damage, and loss of trust.
The Industry
Digital banking is transforming the way people access and manage their finances. With digital banking, you can take advantage of convenient features such as online budgeting tools, real-time alerts for suspicious activity, and much more. Additionally, with many banks now offering digital-only accounts that are opened and managed entirely online, it’s easier than ever to keep track of your money from anywhere in the world! The benefits of using digital banking are numerous:
No need to visit a physical bank branch or wait in line;
Customers access 24/7 from any device with an internet connection;
Remote check deposits using smartphones; and
Peer-to-peer transfers and payments.
Types of Cyber Threats in Digital Banking
Hackers see digital banking as a huge opportunity because sensitive information such as your financial information is now more accessible than ever since its online. Consequently, hackers can exploit these weaknesses and gain access to sensitive customer information at any given time for both financial institutions and their customers. Several common types of cybersecurity attacks that are performed by hackers:
Social engineering schemes involve attackers attempting to trick individuals into giving away sensitive information or performing actions that compromise security by impersonating trusted sources like customer service representatives over phone calls and emails.
Phishing is a common type of social engineering attack in which an attacker attempts to steal sensitive information such as login credentials or financial data by disguising themselves as a trustworthy entity through email.
Malware refers to malicious software installed on computers without users' knowledge to steal information or disrupt computer systems.
Ransomware is a popular form of malware used by attackers to encrypt victims' files until they pay a ransom so they can restore access again.
Card skimming occurs when criminals physically install devices on ATMs or other point-of-sales to capture debit/credit card details entered during transactions.
Insider threat refers to employees who misuse their access rights within the organization either intentionally or unintentionally due to a lack of training and awareness around security policies.
“What can we do about it?”
It is crucial for all financial institutions, including banks, to have robust security measures in place to protect against these cyber threats. Here are a few fundamental approaches to protect your organization against security risks:
Encryption: This is the process of converting sensitive information into a code to protect it from unauthorized access. Financial institutions should use encryption to protect the data transmitted between their systems and the user's device, and also when the data is being stored on servers and devices.
Multi-factor authentication: This serves as an additional layer of protection by requiring users to provide multiple forms of identification, such as a password and a fingerprint or a code sent to a mobile phone, before accessing their account. This helps protect the financial institutions employees, but also their customers.
Firewalls and intrusion detection/prevention systems: These are used to monitor and block unauthorized access to a network. Financial institutions should use these systems to protect their networks from cyber attacks, and detect them when they are under attack.
Regular software updates and patch management: Keeping all software up-to-date and implementing patches can help prevent vulnerabilities from being exploited by hackers. Financial institutions should ensure that their systems are always updated with the latest security patches.
Regular security assessments and awareness training: Financial institutions should conduct regular security assessments to identify vulnerabilities and implement measures to address them. Educating employees and customers about cyber threats and keeping them informed about the latest threats can help to avoid and protect the threat against them, saving them time and money.
“What else can I do?”
Need help designing the best cybersecurity strategy for your financial institution? Reach out to our team of experts to learn more about how we can deliver a complete tailored solution for your company’s needs.
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