Cybersecurity in the Banking Sector

The banking sector has increasingly depended on and incorporated online banking techniques into daily transactions. While this has generated many profits for banks, it has also posed new security challenges. Cybersecurity in the banking sector is becoming more important with each passing day!

Cybersecurity in the Banking Sector is the process of protecting the bank’s assets, customer information, and resources. Cybersecurity attacks on banks cost a lot in terms of time and money, not just as a result of the cyberattack but also from aggrieved customers or regulations set by the state.

In this article, we will see how technology and the online world have benefited the banking sector, the challenges faced by this sector regarding cybersecurity, and examples and statistics regarding cyberattacks in this vital sector.

How Technology Evolved in the Banking Sector

Despite what many might think, Banks and the financial system as a whole have been using cybersecurity to protect data, operating systems, and all their transactions in an attempt to fend off cases of fraud or identity theft.

In this regard, the growth of the size of the global cybersecurity market is estimated to reach $345.4 billion by 2026, according to Statista. So it’s only expected that the importance of cybersecurity in the banking sector will increase in the coming future.

Despite continuous growth over the years, banks have always been a dreadful errand, where you have to stand in a long queue and wait for hours. Technology helped polish this image of banks and financial transactions. Here are some of the many ways technology was beneficial to the financial sector in general and to banks in particular.

Everything is One Touch Away

As we can now order almost everything we want online, you can perform all the operations you once needed to go to the bank in the comfort of your home. You can check your bank account and your balance, pay bills, make a purchase, or make a deposit. This development has enabled you to create an investment certificate wherever you are.

This technological advance is facilitated using Multi-Factor Authentication; which is the most popular way of verifying it’s you making these financial changes to your bank account. Multi-factor authentication can be used in two ways to authenticate your identity. The first is through sending you a text message with a code to verify it was you making the changes. The other way, which is more secure, is through using an OTP (one-time password) application set by the bank to verify the changes.

Less Room for Human Error and Better Protection of Data

When banks were all dependent on paperwork and the skills of their employees, the room for error was massive. No matter how focused you are, you will miss something at a given point, and when it comes to financial transactions and data, the smallest detail is as important as the big one.

The introduction of technology in the form of computers helped reduce the error possibility to almost zero, which is staggering. Another merit of introducing computers was the better protection of data, which was once obtained easily by stealing some papers. Now, a cybersecurity system supervised by trained security officials helps protect data from any possible cyberattack.

Enhancing Customer Experience

The old banking systems required you to head to the bank, by yourself or someone you’ve legally authorised, to perform any monetary transaction or operation, no matter how small. You also needed to fill out and file a lot of paperwork and stand in a long queue for a long time. It might even take your entire day. Sometimes, you don’t even finish what you went to the bank for.

Today, however, you can finish many bank-related tasks and operations, all hassle-free. This also reduced the time you would’ve needed to spend at the bank, all due to the development of Internet Banking and Mobile Banking Applications. Each bank has its banking application where you can securely perform all these financial operations.

While this saves you much time, it also benefits the bank. Since the bank works to facilitate your banking experience, it also works to achieve customer satisfaction. Hence, boosting the bank’s reputation and attracting more customers. It’s a win-win situation.

Using Business Intelligence to Boost Profitability

Business Intelligence was a strategy system recommended for banks all over India. This system had a database of past, current, and possible future trends, which allowed banking systems to forecast the financial sector’s evolution and make decisions based on such evolutions. Eventually, BI helped banks make better decisions about increasing their profitability, productivity, and efficiency.

The Effect of Cybersecurity on the Banking Sector

The banking sector, like all other sectors of society, has benefited greatly from technological advances. Constant improvement in the field of cybersecurity has also served the banking sector and continues to do so, such as in the following cases:

To Monitor and Prevent Fraud

Personal information is the key to gaining access to someone’s bank account. When customers use their bank account to perform any monetary process or use one of the bank’s services, they develop a certain pattern, almost like a distinguished fingerprint. Banks are working to increase the integration of machine learning algorithms that identify each customer’s banking fingerprint.

If a hacker was able to obtain the personal information of a customer, use their bank account to transfer money to themselves or use it for other seemingly legal but suspicious activities, the algorithms are able to detect this false activity and alert the bank of the breach.

The Security of Payments

One of the most common ways hackers try to obtain bank customers’ personal information is by sending them a fake email from their bank asking them to verify their information by either clicking on an attached link or providing the credentials they use in their banking operations.

If the customer falls for the fake email, the hacker will then have a copy of their personal information or bank credentials, and they can use it however they want. For this reason, the existence of anti-phishing protocols or tools as part of the bank’s cybersecurity system is vital. These protocols or tools allow the bank to protect its customers by keeping track of these bogus emails.

Identification of Compromised Devices

The evolution of online banking has allowed everyone to access their bank account in the comfort of their home, using their computer or even mobile phones, since some banks have developed a mobile application for ease of access. It’s not very often you find the internet network at home as secure as it might be on the bank’s end, which provides an easy door for hackers to slip through.

Detecting a customer’s bank account hacking might be tricky if it happened through the customer’s home network. If any suspicious activity occurs, the bank will need to use Threat Intelligence tools to keep track of the bank user’s activities.

Retrieving Data

When conducting monetary processes through their bank account, users must provide certain information to verify their identity, like the account numbers or PIN codes. In this regard, banks need to always stay alert for the theft of any credentials and be able to spot such behaviour to prevent illegal access to the customer’s bank account.

Here, methods such as Multifactor Authentication come in handy, where the bank requires the bank user to enter a code sent to them via text message. Even though hackers found a way around using MFA, a more secure method was developed: an OTP or a One-Time Password, sent to the user via a separate application developed by the bank and installed on the user’s phone.

Tools for Data Protection

Hackers gain money when they breach a person’s bank account. However, a higher end is that these hacked accounts can lead the hackers to obtain sensitive company data. A hacker who breaches a bank’s cybersecurity system can steal corporate, financial, and personal data.

If a bank’s data system is infiltrated, stealing money will be the least of the bank’s problems. Identities will get stolen; even worse, the hacker can leverage the data and ask for money in return. This is why it’s important for the banks to use the proper methods for storing and protecting their data, such as using blockchain to decentralise data by dividing it into many pieces, stored in different nods.

Why is Cybersecurity important in the Banking Sector?

In the past, money only needed to be protected physically by appointing alarm systems and able security personnel. Today, however, the threats to money have taken up another dimension: a cyber dimension. Here’s why the Banking Sector needs cybersecurity:

Preventing Financial Losses

Millions of people’s information is stored in the bank’s system, and any breach of this system can result in a horrible outcome. On the other hand, if a hacker is able to gain access to your bank account, they will easily drain your account of any money, and even if you are able to regain access to your bank account, it’s almost impossible to recover the stolen money. In the event a hacker was able to access your bank account, banks follow one of three ways to handle such a problem:

1. The bank will pay you the amount of stolen money as compensation.
2. The bank will freeze your account indefinitely.
3. The entire bank branch, where the fraud or theft occurred, will be closed.

The first two options can be damaging to the bank since paying money as compensation can be costly, while freezing clients’ accounts will eventually lead to losing clients. To avoid fraud from the beginning, banks use technological advancements such as biometric authentication and AI to lower the risks of fraud and cyberattacks, eventually leading to the security of financial transactions. Implementing such protective measures will also increase customers’ trust in their banks and boost the bank’s reputation.

Protection of Consumer Data

Data has always been the ultimate goal behind any cyberattack, no matter the means used. Banking systems keep data regarding billions of people around the world, and the protection of this data and customer transactions must be at the top of any banking system’s agenda. The threats to consumer data are endless, such as:

1. Identity Theft happens when the attacker attempts to change the victim’s personal information and later uses it to access their bank account or any data that they can use to obtain illegal gains.
2. Phishing: The most popular version of phishing involves malware, including malware-infested emails, text messages, links, and even websites. Using any of these channels, the attacker will make the website or message look as official as possible to lure you in. The result is the theft of your personal information, including social security numbers, banking information, credit card information, and the list goes on.
3. DoS (Denial of Service): Denial of Service attacks aim to disrupt the services offered by an organisation’s website. They work by flooding the organisation’s network with requests, which jams the network and eventually breaks down due to overload.
4. Pharming: Instead of directing you to the organisation’s website or service you want to access, Pharming will redirect you to a fake website where the hacker can steal your data easily. As you enter your credit card or payment information on this fake website, you give the attacker access to your data. Hence, this form of cybersecurity attack doesn’t only put your data at risk but also your finances.

All these possible cybersecurity attacks use the victim’s personal information to also obtain personal illegal gains. However, such stolen personal information can also be used for many other purposes, such as leverage and political wars for example. Organisations such as Citigroup began using biometric authentication for all the customers from the US.

Preserving the Bank’s Reputation

Due to the sensitivity of the dealings inside banks, with regards to both data and money, banks always had strict protocols and regulations to follow, which at the beginning wasn’t something encouraging when adopting new technologies. This changed with the increase in cybersecurity attacks on banking systems, so banks had to move quickly to keep up.

A cybersecurity attack might instantly affect the bank’s finances, but it will also hurt the bank’s reputation in the long run, especially if there were repeated attacks. The cybersecurity giant Kaspersky conducted a survey of customers in the UK, the US, Germany and India, which resulted in more than 94% of the customers saying if their data was harmed or got into the wrong hands, they’ll definitely change banks.

Sixty percent of those surveyed also stated they take a long time before deciding on a bank to work with, this hesitation was driven by fear of getting their data stolen. A Comparitech report in 2020 used the scores of cyberattack vulnerability to determine which countries were cyber safe. Japan came first, followed by Ireland, Germany, Sweden and Denmark.

This is why adopting new technology such as AI and data encryption is vital to the life of a banking system.

Avoiding the Implementation of Penalties Due to Non-Compliance with FDIC

The Federal Deposit Insurance Corporation sets the protocols and regulations set for banks to follow. Failure to comply with these regulations can result in the imposing of serious penalties such as fines upon the violating bank, the penalties can even result in the permanent closure of the said bank.

Some of the previous penalties imposed by the FDIC included:

1. Payment of $1 million dollars for a single violation.
2. In cases of severe violation, imprisonment for a year.
3. Ratification of the violations of the contracts.

The penalties are so severe since they aim to protect customer data, finances, the bank and the financial sector as a whole. So, it only makes sense to seek the protection of a good cybersecurity system. In this regard, some FinTech companies use blockchain technology as one of the many solutions of cybersecurity, all to help in elevating the bank’s protection standards.

Other financial institutions seek the help of blockchain developers to benefit from this technology. Blockchain technology can assist in providing protection for the financial systems, such as:

1. Blockchain allows financial institutions to do both: follow the regulations of the FDIC and avoid being fined by them. The technology helps do that by allowing financial institutions to store all their clients’ sensitive information in a decentralised database.
2. The use of blockchain gives the banks the opportunity to share information regarding their clients without the risk of putting their identity or security at risk. This particular point will help in preventing fraud, identity theft and money laundering attempts in the future.
3. Integration of blockchain in the bank’s system allows the creation of an efficient system for preventing security breaches, most notably phishing attempts, Man in The Middle attacks (MITM) and Distributed Denial of Service attacks (DDoS).
4. Encryption technology in blockchain means it is more secure than the regular protection systems, which also means blockchain is almost impossible to hack. On another note, the decentralisation of blockchain makes it more secure than regular databases.
5. Blockchain stores information by splitting sensitive information into several pieces and then storing it on different nodes, which leads to the decentralisation of the whole system. In this regard, if the hacker succeeds in attaining a single piece of information, they won’t be able to have a complete puzzle of information to misuse.

Service Digitisation

The digitisation of services in the banking sector helped raise customer satisfaction by facilitating how customers obtain services. However, this satisfaction comes at a high cost: the nearly constant threat to data and finances from hackers.

Some of the services facilitated through digitisation include:

1. Customers are able to get their paychecks in mere days, due to direct deposits.
2. You can use your e-wallet to get whatever you want online, whether to buy groceries or even buy shares in a certain company.
3. If you have an internet connection, you can use your bank account to transfer money not only inside your country but also to another country.

The increase in digitising banking services naturally led to a lot of spending on continuously upgrading the banking system. This means that the bank incurs huge costs for the upgrade but doesn’t get any revenue or compensation in return. The reason for this is mainly that customers rarely need the help of the bank’s personnel anymore, as they’ve mastered how to manage their accounts themselves.

The way to give back to the bank for the investment in service digitisation is by utilising the tools of cybersecurity to provide the best protection for all the sensitive information and finances held by the bank.

What Are the Cybersecurity Challenges Faced by Banks?

There are many challenges banks face when it comes to cybersecurity, such as:

Mobile and Online Banking

The introduction of online banking facilitated how individuals access their banking data anywhere and at any time, as well as making many services available that were only once offered at the bank premises. Even if the bank has set up its cybersecurity network to protect client data and safeguard the bank’s information network, a threat is still imminent from the other end.

While accessing your bank accounts using a computer can still be secured by having protection software installed, more people are using their mobile phones to access their bank accounts. Mobile phones are not as secure as using a computer since protection software is rarely installed on them. Not to mention, mobile phones are easier to hack, giving easy access to your banking information.

You must use your bank’s trusted mobile application, and it would be better if you got protection software installed on your mobile if you use it very often to access your bank account.

Balance between Security and Convenience

Any bank’s security measures must balance two main components: security and convenience. If the bank’s security measures are not adequate, this can easily lead to data breaches and theft, which will lead customers to switch to another bank. On the other hand, if the security measures are too strict or complicated, customers will most likely switch to other banks with more leniency.

The inconvenience of the bank’s security measures will result in extra costs for upgrading or changing them. This means hiring more personnel, purchasing hardware, and installing software.

Multi-Factor Authentication

Multi-factor Authentication (MFA) revolutionised the banking sector. MFA easily facilitated online banking processes and allowed individuals to make transactions, pay bills, and transfer money, all using their bank’s online system or mobile banking application, just to name a few.

The challenge with MFA is that many are based on phone calls or text messages. Text messages, for example, are not encrypted; rather, they are sent as simple text. An automated Man in the Middle Attack can intercept this text message and gain access to the victim’s bank account by entering the authentication code.

The Effectiveness in Managing Risks of Breaches

The bank might have one of the best cybersecurity systems in place, but this doesn’t mean that hackers can’t or won’t stop until they’ve found a way to get around it. To avoid any compromise to their cybersecurity systems, banks must always test these systems, check for any vulnerabilities and apply any recommended or possible updates to the system. Banks must also seek to implement the latest technologies in the field of cybersecurity to tighten their grip on hackers.

Breach of Third-Party Data

Hackers are constantly devising new ways to breach the defences of banking systems. One of the most recent ways for hackers to gain access is through shared banking systems and third-party networks, which the hackers are using to perform their attacks.

A cybersecurity plan for the shared banking system is inevitable in order to protect the transactions and banking services used by individuals. A cyber security breach to the data network will cause a major breach that will result in the leakage of sensitive data regarding clients and organisations and could also result in a national threat.

The Financial Impact of Breaches

While the immediate damage from a hacker obtaining the banking information of a certain person is to the victim, there’s also a huge impact and damage to the bank. The data which the hacker was able to obtain can be used to steal money for a more direct purpose but can also be used for numerous illegal activities.

This also applies when the hacker is able to crack the bank’s cybersecurity system and acquire sensitive information. Such a security breach can lead to many lawsuits filed against the bank and even result in the changing of the applicable government regulations.

All these extra costs, including defending themselves in the lawsuits, paying compensation, and even changing procedure protocol to implement the new regulations, mean the bank will incur massive costs. This will have an overall bad effect on the bank’s profit margins since these additional costs are deducted from the bank’s revenues.

Cryptocurrency

Since its invention in 2009 and for the following ten years, there have been major cyber security attacks on many cryptocurrency-related services, such as crypto exchanges, including malware, phishing, and even targeted attacks. These attacks were mainly due to the lack of cybersecurity protection provided to the decentralised currency markets.

Cryptocurrency is protected through crypto wallets and blockchain technology. Outside these two venues, it’s nearly impossible to apply the cybersecurity of the banking system to cryptocurrency, which leaves many gaps in the protection of this new currency. This will leave many doors open for hackers to steal the coins and make illegal profits off the increase in the market.

The Evolvement of Cybersecurity Threats and Vulnerability Points

Technology is not only evolving in the field of cybersecurity in all sectors, but it is also evolving when it comes to the methods hackers use to undertake cyberattacks. This naturally results in the constant updating of the bank’s cybersecurity system to keep up with all software and technological advances regarding that security system.

In addition to working tirelessly to keep up with evolving hacking methods, banks spend a lot of money and time hiring extra personnel, installing new hardware, and updating software. This takes a huge chunk of the bank’s revenues to keep up with the evolution of cybersecurity threats and vulnerability points.

Banks Must Invest in New Technology

Unfortunately, no matter how quickly banks adopt all the new technological advances, they can still be one step behind hackers. This is mainly due to the time hackers have on their hands; they work day and night to find loopholes and vulnerability points to hack a bank’s system. The more time those hacks have, the more likely they will succeed in their hacking attack.

Banks have been known to be rigid when adopting new technology, probably because of the complicated and lengthy protocols and regulations they must follow in almost every process they undertake. However, banks must step up their technological game and adopt the new technological advances in cybersecurity firsthand.

Most Common Cybersecurity Attacks on Banks

While the density of cybersecurity attacks differs year after year, some attacks remain constant, while the danger of others increases significantly. Here are the most common cybersecurity attacks to expect will continue:

Ransomware

Ransomware is one of the most used and annoying methods used by attackers. This is where the attacker locks organisations out of using their data and demands a ransom to give them access again. If the institution doesn’t have a backup of its data, such a security breach will result in crippling the business and will lead to unquantifiable losses for the institution. Even though some organisations can pay the requested ransom, that doesn’t guarantee the safe return of their data, in many cases that doesn’t happen.

Cloud Cyberattacks

Hackers are upping their game to keep up with the increased use of cloud storage and management for data, resulting in an increase in attacks on cloud systems. The best way to protect clouds is by ensuring their security infrastructure is well-defined and configured.

Remote Working

With the third year of the COVID-19 pandemic underway, more people are working from home, and businesses, including the financial sector and banks, are beginning to rely more on the cloud to store and manage data. Since businesses’ data is no longer stored on regular systems or networks, this creates new vulnerabilities for these businesses.

Supply-Chain Attacks

This is one form of attack that is becoming increasingly popular. Using the supplier or vendor’s network, the attacker uses fake products and advertisements to send customers malicious code. The product will appear genuine since the attacker sends the code using the vendor’s network. The danger of these attacks is that they allow the attacker to enter the customer data stored by the vendor.

Social Engineering

People will remain one of the weakest links in the security chain since attackers can trick them and steal their information. This is why social engineering is one of the most dangerous forms of cyberattacks facing banks, as it also targets customers and employees.

There are many forms of social engineering attacks, including phishing, bogus emails pretending to be from a trusted source and whaling attacks. Offering cybersecurity awareness classes for your employees is important so they can be more cautious about what they receive.

Examples of Cybersecurity Attacks on Banks

Cyberattacks on banks in the past years have increased, especially with the increase in reliance on the Internet and mobile banking. Here are examples of some of the recent cybersecurity attacks in the past years:

1. Flagstar Bank in the United States was the target of a ransomware attack in 2020. Hackers posted the personal data of the bank’s customers online to force the bank to pay the ransom.
2. In 2020, a distributed denial of Service (DDoS) attack targeted one of the New Zealand Stock Exchange servers, causing the exchange to shut down until the attack was contained and handled.
3. Robinhood, an online stock platform for trading, was targeted with an attack in 2021, which revealed the personal information of 7 million customers.
4. The customers’ ability to access their banking accounts online in Pichincha Bank, a bank in Ecuador, after being the target of a cyberattack in 2021.

Statistics of Cybersecurity in the Banking Sector

Banks are one of the main elements of the Financial Sector in any country, and cyberattacks on this integral sector directly affect banks. Here are some of the most recent statistics in the financial sector, with a focus on the banking sector:

Money Is the Motivation behind 71% of Cyberattacks

Verizon research confirms that obtaining illegal finances remains the main objective behind the majority of cyberattacks. The research stated that organised crime groups are responsible for about 39% of the overall data breaches. Another alarming finding of the research is that a whopping 56% of data breaches were discovered after months of the breach date. If this is an indication of something, it is that cybercriminals are becoming more experienced.

Eighty Percent of Data Breaches in the Financial Sector Are the Result of Investigations regarding Payment Cards

SecurityMetrics released a report that clarifies how e-commerce resulted in a spike in data breaches. The same study, which was conducted six years apart, shows that the majority of the breaches in recent years have shifted from the online sellers’ side to the consumer side. If this indicates anything, it is the heavy dependence of consumers on online shopping in recent years.

The Banking Sector Incurs the Highest Costs of Data Breaches, with a Yearly Estimate of $18.3 Million per Company

According to Accenture, the financial sector and the banking sector, in particular, have spent record amounts of money in the past years to keep their cybersecurity systems up to date and to protect their customers’ valuable holdings.

Another reason behind the high cost of successful cyberattacks on banks is the damage they cause to their reputation and their effect on customers’ trust. These two factors result in customers switching to other banks, which means less revenue for the bank.

Forty-seven per cent of Data Breaches in the Financial Sector in 2017 Targeted Banks

The most attacked financial institutions in the financial sector are banks. During the past three years, this high percentage of cyberattacks also began to include cryptocurrency projects. According to ERPScan, cyberattacks targeting cryptocurrency projects amounted to 21% in 2017, followed by loan companies in third place with 11%.

Your Data Remain Compromised for 127 Days after Being Captured

One might think that after your data has been stolen once, retrieved and security restored, that all is done. This is far from the truth, says SecurityMetrics, as after the first instance when the hacker stole your data, they can still be recording, gathering and storing it for a period of time up to 127 days. Your data remains vulnerable for over six months after an attack.

On the other hand, if the cyberattack targeted an organisation, its data would remain under the same threat for about 257 days. This would cost organisations, especially financial ones, huge amounts of money and loom over them with a cloud of uncertainty.

Ninety-two per cent of ATMs Are Prone to Cyberattacks

Positive Technologies issued a report they worked on that showed how ATMs remain an easy target for cyberattacks. The report explained that 85% of ATMs are vulnerable to many types of cyber and network attacks, and their security systems aren’t enough to stop the attacks.

The ATMs tested in the reported study showed vulnerability to tampering with the access centre. Black box attacks could easily target 69% of ATMs, and a staggering 76% of ATMs easily gave the hacker access to their operating system after exiting the kiosk mode.

The Devices of over 500 Million Users Are Infected with Crypto-Mining Software

According to a report by AdGuard about the statistics of data breaches, 200 websites with a total number of 500 million users were the reason the devices of these users got infected with crypto-mining software, all within the record period of three weeks. The average amount of money these websites made during this period was $43,000.

The money these websites made was not the only problem with crypto-mining programs. These harmful programs caused further damage to the victims’ computers, which posed a new problem for the users.

A Single Data Breach Costs an Average of $3.92 Million

Generally, the cost of a successful data breach differs from country to country. However, the average cost of almost $4 million is still high, according to IBM. The United States had the highest cost of a single data breach, amounting to $8.19 million.

Ninety-seven of Stolen Records Are American

Gemalto stated that the world’s most powerful economy of the United States is the target of the majority of cyberattacks, with around 60% of cybersecurity breaches taking place in the States. Furthermore, stolen American records reached a staggering 96% of the total records stolen.

In 2017, 65% of America’s 100 Top Banks Failed in Tests about Web Security

Statistics released by IBS Intelligence revealed that even some of the most popular banks in the United States don’t have the best cybersecurity systems to protect their websites. Of the banks tested, only 27% passed the testing to be classified as safe from breaches. The more surprising statistic is that this percentage represents a 28% drop compared to 2016.

In 2018, There Was an Increase by 60% in the Financial Impact That Ransomware Attacks Had on Economies

A bittersweet report released by the Internet Society about cyberattacks and data breaches revealed that the number of both data breaches and stolen records had fallen compared to 2017; the financial impact of these breaches and stolen records was higher than in 2017.

The report further stated that the affected businesses saw a doubling of their losses during the same period while cryptojacking incidents tripled. High-level breaches saw a steady and constant increase throughout the same year.

Sixty-six per cent of the Businesses Affected by Data Breaches Are Uncertain If They’ll Be Able to Recover

IBM revealed in a report how the number of cybercrimes is multiplying to mirror technological advances. The report sought the opinions of 2,400 security and IT professionals, of whom 75% stated there was no action plan during a cyberattack. Unsurprisingly, more than two-thirds of businesses affected by successful cyberattacks express doubt they’ll ever recover from such attacks.

In 2018, Formjacking Code Was the Main Threat to an Average of 4,818 Websites

Formjacking is defined as using malicious JavaScript code to steal payment information, including credit card numbers and details, from eCommerce websites. As stated in a cybersecurity statistics report by Symantec, the use of this form of attack rose in 2018 compared to the year before.

In further explanation, Symantec said that stealing the information of just ten credit cards from these eCommerce websites translates to about $2.2 million. This might explain why using formjacking is increasingly becoming a more popular means of conducting a cyberattack among criminals.

The Century’s Largest Robbery of $1 Billion Was the Work of the Carbank Gang

The Carbank Gang used spear phishing emails to target 100 banks from 30 different countries around the world and steal a staggering $1 billion, making this robbery the biggest in this century, according to a report by Kaspersky. The gruesome malware attacks conducted by the gang lasted for more than two years and directly targeted the banks rather than the banks’ customers.

In the US, 8 out of 10 Adult Citizens Fear Businesses Are Unable to Secure Their Financial Information

 AICPA’s (American Institute of Certified Public Accountants) report showed that Americans continuously lose faith in financial institutions. They believe these institutions cannot keep their financial data safe. Hence, more than half of Americans expected they’d fall victim to fraud that would hurt their finances.

Threat of Cybersecurity Breaches Drove about 80% of Adult Americans to Change Their Behaviour

The study conducted by the AICPA stated that 56% of the people surveyed revealed they monitor their accounts themselves against fraudulent or suspicious behaviour. A further 43% admitted to using cash and cheques instead of relying on credit cards to lower the risk of a cyberattack.

After many high-profile data breaches, people’s behaviour continued to change when it came to spending their money. The study said that 40% of people shifted from shopping at national chain stores to local shops to decrease their dependency on credit cards.

In another attempt to lower the risk of falling victim to fraud, around 26% of people decided to reduce their presence on social media, and a fifth of the people surveyed said they sought the services of monitoring and fraud detection.

Emotet Malware Is Responsible for 16% of the Financial Trojans

Emotet was discovered in 2014. It was designed as a Trojan to steal sensitive information by being embedded in spam emails. This new malware can escape software designed to detect malware, which increased Emotet’s share of financial Trojans by 2017 to 4%. After three years, the financial Trojans Emotet was responsible for jumped up four times.

According to Symantec, Emotet can sometimes be used to spread Qakbot or Qbot, another malware used for stealing information that’s been around since 2007. More recently, the discovery of Qakbot in the system means there was a huge ransomware attack about to take place, where Qakbot is used to install harmful software.

Financial Institutions Are 300 Times More Likely to Be a Target for Cyberattacks

In 2018, there was an alarming increase in cyberattacks on financial institutions, up to 67%. As stated in research about major data breaches conducted by Carbon Black, 26 of the financial institutions surveyed admitted to having suffered from destructive cyberattacks. This percentage represented a 160% increase in the attacks on these institutions compared to the beginning of 2018.

According to 79% of the security officers working in corporates surveyed in the research, one contributing factor to this increase in cyberattacks on financial institutions is the increased complexity of these cyberattacks.

The COVID-19 pandemic was regarded as a factor that would result in a spike in cyberattacks, leading the European Central Bank to issue guidelines urging financial institutions, and banks in particular, to double-check their cyber security systems and brace themselves for a new wave of cyberattacks. This was also fueled by the increase in people working from home during the pandemic, which might put the banking networks at risk.

According to the FBI, Ransomware Attacks Accumulated $1 Billion per Year

In a report released by the US Department of Justice, the department not only states that ransomware scammers were able to obtain $1 billion per year but also that around 100,000 computers are infected with ransomware every day on a global scale. The reason behind this staggering increase in the money stolen by these ransomware attacks is that the attackers’ target changed from ordinary people to large corporations and businesses.

Unfortunately, the bleak report also stated that these ransomware attacks would not slow down. By the end of 2021, it was estimated that every 11 seconds, a new business would fall victim to a ransomware attack.

By the End of 2018, the Number of Crypto-Jacking URLs Doubled

Help Net Security stated that this unprecedented increase was mainly due to the rise in the popularity and value of Bitcoin. Cryptojacking is a type of cybercrime in which the attacker secretly hacks and uses the victim’s computer to mine cryptocurrency.

The reason behind the popularity of cryptojacking is the small footprint it leaves and the fact that victims don’t need to pay a ransom, unlike in cases of ransomware. Despite this, in 2019’s second half, cryptojacking attacks fell by 78%.

Sixty Percent of Americans Said They or Close Family Members Were Victims of Data Related Fraud

According to the AICPA, the number of Americans facing cybersecurity attacks in the form of fraud or identity theft is increasing. A different form of communication, impersonating the IRS, represented 34% of reported attacks. These attacks were conducted using letters, emails, and even calls. The following two cybersecurity attacks were credit card numbers theft, with 28%, followed by phishing scams and fraudulent emails, with 26%.

By 2027, Spending on Training Staff in the Field of Cybersecurity Will Amount to $10 Billion

By the end of 2020, it was estimated that the number of people online reached a staggering 4 billion. Regular cybersecurity measures and protocols won’t be sufficient to keep businesses protected from the flood of cyberattacks. As pointed out by Cybersecurity Ventures, businesses need to pay more attention to training their staff in cybersecurity to lower the effect human error still has in unintentionally facilitating cybercrime.

In 2019, 1,473 Cybersecurity Attacks Targeted the United States, Where 164.6 Million Records Were Stolen

Statista revealed that even though the total number of data breaches increased, the actual number of stolen records fell from 472 million in 2018 to 164.6 million in 2019. This decrease also indicated the seriousness with which cybersecurity crime and data breaches were handled in the US. Only 35.7 million records were stolen annually about a decade ago.

Cybersecurity Is the Top Concern for Most Community Banks in the United States

The Conference of State Bank Supervisor conducted a survey about the top concerns for community banks, where a total of 571 banks from 37 states were surveyed. The results of the survey showed that more than 70% of the participating banks said their top concern was cybersecurity.

The Majority of Financial Institutions Suffered from a Recent Cybersecurity Breach

Vanson Bourne is a technological research firm that conducted a survey of 100 senior business professionals hired by financial organisations in the UK. The survey revealed that 70% of these financial organisations suffered a cybersecurity data breach in the past 12 months.

The main reason cited for this high percentage of attacks was the failure of the organizations’ employees to follow the defence protocols against cybersecurity attacks. Other reasons included using third-party devices such as USBs that already carried viruses and malware, which amounted to 32%, downloading files and images at 25%, and accidentally sharing data with others at 24%.   

Cybersecurity Attacks Involving Data Breaches Will Only Continue to Grow

In a report by Accenture released in 2019 titled “Cost of Cybercrime Study in Financial Services,” the number of data breaches increased by 13% in 2018 to 152, compared to 134 in 2017.

There were some shocking facts included in that report, such as:

1. Malicious Insiders topped the list as the most expensive attack to resolve: the report cited an increase of 44%, with an average cost of $243,101. The top five costly cyberattacks were malicious code with a cost of %157,891, phishing and social engineering averaged at %156,690, DoS of denial of service attacks costing $133,949, and finally, web-based attacks costing $84,954.
2. Malicious insiders took the longest to resolve: an average of 55 days for the financial sector’s IT officials to resolve them. Following these were malicious code, with 49.8 days, ransomware, 33.8, web-based attacks, and phishing and social engineering attacks, with an average of 24.3 days.
3. The financial sector loses an average of $18.5 million to cybercrime every year, according to the report. This average cost is per company, which is a huge amount. This makes cybercrime more costly in the financial sector than in other sectors, where an average cybercrime attack costs an average of $13 million.

Financial Institutions Allocate 0.3% of Their Revenue to Cybersecurity

A study by a consulting firm called Deloitte, which included employees from 96 financial firms, concluded that 0.3% of the revenue and 10% of the IT budget of these firms are allocated to cybersecurity. This means the average per employee is $2,300.

The Banking Sector Is Expected to Invest in Cybersecurity More than Any Other Sector

The research firm IDC forecasted that the banking industry is the one with the highest investment in cybersecurity, followed by the manufacturing sector and federal governments, together they all represent 30% of the global spending on cybersecurity. According to the IDC, by 2023, the total cost of this investment will amount to $151.2 billion. The research also concludes that these three sectors are likely to spend 35% of their budgets on services of managed security and services of integration.

Financial Institutions Are Better at Detecting Data Breaches than Preventing Them

Ponemon Institute conducted a survey that included 400 cybersecurity officials from different financial sector institutions. The survey revealed that financial institutions are better at detecting cybersecurity attacks (56%) and containing these attacks (53%) than at preventing cybersecurity attacks (31%).

Other findings of the survey included that the main concern for many in the financial industry is the risks to the supply chain, however not a great number of these institutions allocate enough resources to handle those risks. Around 74% of the participants cited worries regarding the security status of third-party applications and software. In comparison, only 43% of financial institutions enforce their cybersecurity requirements on third parties.

Financial Institutions, including Banks, Get Thousands of Cyberattack Attempts Every Day

In an interview with the New York Times, credit card company Mastercard shared with the newspaper the staggering number of cyberattack attempts they face in a day, which on some days exceeded 460,000. However, what Mastercard was facing wasn’t an isolated incident. Ovum conducted market research in 2017 that revealed that around 40% of banks receive 160,000 daily cybersecurity alerts, ranging from irrelevant errors to duplicate alerts. It’s worth noting that more than 73% of financial institutions use various tools to detect cybersecurity attack attempts, some of which use more than 24 tools to identify these attacks.

CISO Reports to Whom?

A Chief Information Security Officer is responsible for setting a cybersecurity plan and ensuring that data is well-protected. When a breach in the institution is discovered, part of the cybersecurity action plan is to report to one of the institution’s officials.

Infosys stated that after a survey of 277 senior executives in the sector, 34% of CISOs report to the CIO (Chief Information Officer), while 32% report to the Board of Directors. These two were followed by 23% of CISOs reporting to the Information Security Council, while reporting to the Head of Audit, COO (Chief Operating Officer), Head of Risk, and others got percentages of 5%, 3%, 3%, and 1%, respectively.

Trends of Cybersecurity in the Banking Sector

As the traditional or physical security measures evolved in the Banking sector to help protect the precious belongings stored inside, the means with which criminals developed their tactics to undertake their attacks, the same applies to cybersecurity in the banking sector and the evolution of cyberattacks on such an institution.

A driving force behind the constant technological advances in the online banking sector is the increasing demand by millennials and Generation Z to access all their banking information online. This demand dictates the constant adoption of new technological advances in this vital sector so that banks can keep up with the increasing demand.

Such a driving force will change the face of the banking sector and the entire financial sector. Retail, mobile banking, and even neo-bank startups, this advance is only moving forward into the foreseeable future. In this regard, here are the latest cybersecurity trends in the Banking Sector:

Retail Banking

Retail banking refers to the multiple services offered to customers by banks, such as checking accounts, savings, credit cards, loans, and debit cards. According to Insider Intelligence, thirty-nine per cent of retail banking executives stated that the biggest effect technology has on retail banking is effectively reducing costs, while only 24% of the executives said it’s improving customers’ experience.

One of the newest steps of retail banking, to keep up with the market’s competitiveness, is launching what’s known as the Banking-as-a-Service space, or BaaS. An example of this would be the launching of a BaaS by the British Neo-Bank Starling, after it used to only offer retail banking services directly to the consumer, also known as B2C. The launching of BaaS by Starling upped its revenues as well as its products.

Mobile Banking

In the past few years, almost no financial institution has been able to keep up with its customers’ demands without benefiting from the advancement that is mobile banking. Even though statistics show that older people don’t trust mobile and online banking as much as millennials and new generations do, the move to mobile banking has been of great financial benefit to all the banks that adopted it.

Insider Intelligence conducts an annual study about Mobile Banking Competitive Edge. More than 45% of those included stated that the existence of a mobile banking system is one of the top three factors they consider when settling on a certain bank. Around 80% of those surveyed admitted that the main way they check their bank account is through using their mobile banking application.

Due to the COVID-19 pandemic, reliance on online banking increased dramatically. During times of lockdown, more people turned to online and mobile banking. This is a time for banks to reevaluate their market position and focus on identifying the mobile banking services most valued by their customers.

This increase in mobile banking use triggered the consumer’s fear of data breaches, meaning that banks ought to increase their methods of protecting the consumer’s data. Some of these methods might include giving consumers the ability to place a credit or debit card on hold, scheduling travel alerts, and filing and reviewing card transaction disputes.

Online Banking

Despite the revolution that online banking represents in the banking sector, mobile banking is taking over this role. According to Insider Intelligence, the rate of growth of online banking is five times less than that of mobile banking, not to mention that half of the users of online banking are also users of mobile banking.

Some banks’ failure to pay more attention to constantly updating the list of services they offer through mobile banking pushes their customers to continue using online banking instead, such as paying bills. This might be a faint attempt at promoting online banking, but it’s not as effective a tool as the increase in mobile banking usage by millennials and Generation Z.

Digital-Only Banks

Otherwise known as neo-banks, these are expected to be the future of the banking system. The basis for these new types of banks found solid ground in the COVID-19 pandemic, which helped break some of the many restrictions imposed in the US against the adoption of these banks.

To customers, especially the new generations, neobanks are the new level of banking, which all the financial sector and technology firms need to understand how to benefit from and how it can improve the user experience to help their businesses keep aloft.

The largest neo-bank in the US, Chime, attracted more than 7.4 million customers until 2019, and the number is expected to reach 19.8 million by 2024. The development of these digital-only banks will eventually replace traditional banking institutions.

Trends in Banking Technology

The new generations observe technology as a means of making their lives easier, and technological advancement in the banking sector is no different. One of the most recent trends in banking technology is making financial information easily accessible online to anyone with access to an account. This service is known as API or Application Programming Interface.

Fintechs successfully trialled APIs, using the application to improve their business. This trial is encouraging many other banks to follow suit. An important feature of APIs is that you can use them through the bank’s mobile application to pull down the information on a customer’s account.

Another survey by Insider Intelligence, conducted in 2020, revealed that 66% of banking executives believe a number of new technologies will have a great impact on the banking sector by 2025, such as the Internet of Things (IoT), Artificial Intelligence (AI), and blockchain. Technologies such as blockchain are expected to reduce bank costs and facilitate processes.

On the other hand, banks are incorporating more AI in their services. An example can be the chatbots you will find at the front office. Banks are also using AI, in the form of voice assistants and chatbots, in customer-related services such as identification and authentication.

How Can You Know Your Bank Is Safe?

Banks are rated safe when they have a complete cybersecurity system in place that protects consumers’ data and money. Although it’s not a requirement that banks share all the security measures they undertake to keep their data safe, transparency and honesty with the public are key to having a good reputation, which in the financial sector is what keeps institutions alive.

Here are some factors to take into consideration when determining which bank offers more security measures than other banks, hence choosing them as your banking institution:

1. Two-factor Authentication.
2. Service Branches: If you want to go to one of the bank’s branches, you might want to consider a bank with a branch near you.
3. Guaranteeing your money if someone was able to hack into it and steal your money.
4. Interest Rates: you might want to check which banks have great interest rates on the in-credit balances or best overdrafts.
5. If your debit card is stolen, the bank gives you the ability to disable the card.
6. Incentives: Some banks offer additional services or packages on accounts in exchange for a small monthly fee. Such incentives could include travel insurance, gadget insurance, and breakdown cover.
7. Card numbers for a single-use, which is a single-use temporary card that you can use online, keep the number of your actual credit card out of harm’s way.
8. Customer Service: One of the easiest ways to learn more about a certain bank is to check the reviews customers wrote about it.
9. Cast Reimbursement on the next day: In the event of a dispute that resulted from a data breach and the customer’s money was gone, the bank reimburses the customer’s money the following day so that they wouldn’t have to wait for months before getting their money.
10. Other Financial Products: These include credit cards, mortgage deals, and savings for their current account holders.
11. EMV Chip-cards: These cards are not as easy to clone as regular credit cards. EMV chip cards encrypt the account information with each transaction that takes place.
12. Switching Incentives: occasionally, some banks offer a monetary incentive to persuade you to change from your old account to a new one. At times, some banks offer a switching reward of £100.
13. Liability: These differ depending on whether the used card is a credit or debit card. There are several ways to report fraudulent credit card transactions, such as by phone or online customer service. For a debit card, if the owner reported the theft before any charges were incurred on the card, they will not be considered liable for the charges. If the owner waits two business days after receiving their monthly statement before reporting to the bank, they will be liable for $50. Between these two days and up to 60 days, the owner might incur up to $500, and after 60 days, the owner will be liable for all the charges found on the card.

Best Banks in the US

We’ve seen how hackers constantly improve the tools they use to conduct cyberattacks. Hence, using the security points provided to determine which bank is safe, Lifehacker helped compile a list of some of the safest banks in the US. They are as follows:

1. Ally Bank.
2. Bank of America.
3. Capital One.
4. Chase.
5. Charles Schwab.
6. Citibank.
7. HSBC Bank.
8. Wells Fargo.

All these banks offer their customers cash guarantees against any unauthorised access. Chase Bank offers next day reimbursement, as well as Bank of America, in addition to single-use cards, a service that Citibank also offers.

Best Banks in the UK

A survey conducted by Finder.com of banks in the UK asked participants to rate their satisfaction with their banks and whether they would recommend them to others. Using this data, the website made a list of the best banks in the UK according to customer satisfaction, and the safety of these banking institutions is undoubtedly a factor in this satisfaction.

Here are the top banks in the UK according to customer satisfaction and the percentage of how many of those customers would recommend the bank to others:

1. Halifax, with 88% of customers, would recommend it.
2. Starling Bank, 87% of customers would recommend.
3. NatWest, 86%.
4. Lloyds Bank, 84%.
5. Monzo, 84%.
6. Nationwide Building Society, 83%.
7. Santander, 83%.
8. Monese, 83%.
9. Barclays, 81%.
10. Revolut, 79%.
11. First Direct, 78%.
12. Royal Bank of Scotland, 78%.
13. HSBC, 78%.
14. TSB, 72%.
15. Virgin Money, 72%.
16. Bank of Scotland, 74%.
17. Metro Bank, 68%.

What are the biggest banks in the UK?

There are four banks considered to be the biggest in the UK; they are divided between multinational banking groups and companies of financial services:

1. Barclays: With banking operations in over 50 countries around the world and 48 million customers, Barclays is a multinational company of banking and financial services located in London. The bank’s operations include wealth management, retail, credit cards, mortgage lending, investment banking, and wholesale.
2. HSBC: This banking and financial services company is also based in London. By the total of its assets, it ranks sixth in the world’s list of largest banks and is the largest in the UK and Europe.
3. Lloyds Banking Group: beginning back in Birmingham in 1765, Lloyds Banking Group is over 250 years old. The group now includes Lloyds Bank, Halifax, Bank of Scotland, and several other financial brands, such as Scottish Widows.
4. NetWest Group: including NatWest, Ulster Bank and the Royal Bank of Scotland, this group used to be known as the Royal Bank of Scotland Group. The current group has many branches around the UK.

How Can the Banking Sector Improve Its Cybersecurity?

It’s as clear as the sun that the banking sector’s technological advancements and cybersecurity threats are evolving hand in hand. Banks use new technologies to further enhance the protection of their data and customers, while attackers are also developing their attack methods and tools.

The constant development of cybersecurity in the banking sector benefits customers by protecting their identity, information, and, of course, money. For the bank, it’s more than just the revenues from the influx of customers; it’s also about its reputation. Here are some of the steps banks can take to improve their cybersecurity:

Layered Approach

Banks must put and follow what’s known as a layered approach to their cyber and network security. On the data side, it must be protected using a proactive framework added to the data to secure its protection in the event of an attack.

Data Encryption

Encrypted data is safe wherever it is, whether at the source, in transit, or even at its final place. This encryption allows financial institutions and banks to control the data anywhere. Even when the system fails, the encrypted data remains safe, even as it is stored in the cloud.

Filling the Gap

There’s a huge gap between the number of cybersecurity jobs and the number of those properly trained in the field. Organisations offering cybersecurity services must attract more people to train and excel in cybersecurity. It is also important to ensure your business’s IT team is updated with all the new and advancing cybersecurity attacks.

Limited Access to Data

Where there’s a human element, you can expect something to go wrong, and data is endangered. This is one of the main reasons to limit access to confidential data; it doesn’t mean it’s safely stored and that access can be granted to anyone. This is why access to confidential and sensitive information must be limited only to those needing access.

Appropriate Budget

Handling cybersecurity threats is very costly, and many financial institutions don’t have enough funds to continue dealing with these attacks. In this regard, institutions need to ensure they have the latest attack detection and response tools to help detect and prevent possible future attacks, hence reducing additional costs.

Multi-Factor Authentication

There are several forms of multi-factor authentication, as this step adds more security to the banking process, even if the system gets hacked. MFA is when the banking website or mobile application sends a text message to the customer’s phone with an OTP (one-time password) that is used only once to access the account.

Appropriate Training and Awareness

It’s no secret that only a small percentage of employees actually know what to do in the event they detect or become victims of a cyberattack. This must change. Institutions need to provide proper training and awareness programs for their employees to ensure they are up to date with the action plan to follow in the event of an attack.

Security Assessment

Financial institutions and banks must seek the opinion and security assessment of security advisors. These assessments help identify the weak points in the institution’s cybersecurity network and assist in setting the best protection and defensive strategies.

Weak Credentials

Financial institutions, especially banks, must stress to their customers the importance of using strong passwords and credentials when setting up their accounts. It’s easier for attackers to hack into banks by stealing a customer’s credentials. This is in addition to providing customers with awareness programs about cybersecurity and how to avoid becoming easy prey for cybercriminals.

Hardware Security Modules

Also known as HSMs, these modules are external physical hardware where electronic information is stored, almost like a safe. HSMs are where security keys are stored, managed, and processed, all in a secure device.

Internal Bank Communications

When it comes to detecting a cybersecurity attack, communication is important. Banks can put a communications plan where employees are constantly reminded of their role in data protection, swiftly alerting the concerned teams in the case of the detection of a cyberattack and giving the employees simple steps to follow when discovering a cybersecurity attack.

Best Practices

We come back to one of the most important assets of any institution: its employees. Each financial institution and bank needs to spend the proper funds and time properly educating their employees about cybersecurity attacks, risks, and the institution’s plan of action in the event of detection, handling, or preventing a cybersecurity attack. This will also lower the risk of human error as a cause for cybersecurity attacks, which is one of the top reasons many institutions get attacked.

Cyberattacks in the banking sector will only continue to increase in the years to come, and both technology companies and banks will need to continue working together to keep up with this increase.