Did you know that, despite the widespread reports about the rise of cybercrime in 2020, a sizable amount of the issue is focused on the banking industry’s cybersecurity? Cyberattacks have increased in 80 percent of financial institutions over the past year, a stunning 13 percent increase from the year before. The increase, which was 238 percent, happened between February and April. This should serve as a wake-up call for financial institutions, that much is certain.
The top five factors influencing the rise in cybercrime are listed below. What assault trends need to be watched in 2021, and how can the banking sector strengthen its intelligence to counter the growing threat?
A Rise in Fraud and Identity Theft is the Most Significant Development
One of the leading causes of the 60 percent increase in fraud this year was the rise in banking-related cybercrime. Card cloning is the biggest worry, with incidents increasing by 34% in just one year in 2020, according to the most recent Financial Crime Survey.
Due to enhanced hacking, attackers can now more easily get physical card data when the cards are connected to other devices. Additional attack vectors have surfaced that could give hackers access to stolen EMV data in addition to POS systems and credit card readers. This is done to defraud customers of their money or financial information. It will only be successful if the banks neglect to verify that the CVV number is correctly entered. Recent studies indicate that as a result, more than one-third of all financial institutions may be impacted by this security vulnerability.
It’s also important to note that after COVID-19 was implemented, the price of each fraudulent transaction went up. The results from 2018 showed that the value of every attempted fraud attempt rose by 5.5 percent in 2019. Banks must understand that they can no longer operate under the radar of bank employees unaware of their illegal actions as attackers become more daring in their approaches.
Online Transactions and Communication are Rapidly Becoming the Norm
Due to the epidemic, more people are making purchases online, forcing bankers to evaluate transactions differently than they were used to. The Merchant Risk Council’s Markus Bergthaler claims that “current statistics suggest that over 80% of credit cards in people’s wallets have already been compromised.” Employees need considerable training to differentiate between what seemed to be an outlier last year and what is a lock-down impulse purchase this year.
Increased participation from the High-risk Merchant Category Code businesses is another noteworthy development. According to the FBI, some businesses that are most susceptible to fraud and conflicts include transportation, telecommunications, file sharing, and the cloud. It is simple to understand why cybercrime has increased when considering the growth in communications and transactions in these industries by 2020. Specialized training is beneficial for banking cybersecurity workers. They will be more equipped to handle the higher risk brought on by the sharp rise in traffic to these sectors, which might include customers getting refunds for canceled holidays to businesses expediting cloud roadmaps overnight.
Infrastructure for Banking Cybersecurity is Becoming More Sophisticated
A more significant percentage than in any year prior, a cyberattack was launched against more than 70% of financial companies in 2019. If you look at the rivalry that banks in today’s market face, you’ll notice that:
Older, Outdated Legacy Banking Cybersecurity Systems
Even though maintaining legacy infrastructure is costly and risky, most institutions cannot avoid it. Many banks continue to use legacy systems to store crucial data and software, forcing bank staff to deal with antiquated procedures regularly.
To modernize and embrace digital transformation, financial institutions are increasingly turning to cloud deployments, including server-less and cloud-native architecture. Banks are forced to deal with a hybrid reality that is impossible to imagine and challenging to secure because Legacy cannot be wiped.
Attackers use partner networks and supply chains to get access to financial networks. This ranges from physical partnerships with FinTechs that might take advantage of the financial and regulatory infrastructure to establish a foothold in the financial network to shared cloud storage.
When planning a campaign against a firm, an attacker’s level of sophistication is crucial since they know that the more complex a network is, the less visibility security staff and bank employees would have.
The Capacity to Work Remotely is Available in the Post-COVID era
The size of the operational problems that banks will experience in 2021 can be predicted. According to KPMG’s expectations for banking cybersecurity, closing offshore service centers would result in more outsourcing and, in many cases, long-term work from home. The banking behemoth asserts that “investing in the right support and preparation for staff would be crucial during a trying time.”
Working from home poses several difficulties, such as enforcing Bring Your Device (BYOD) rules, navigating the realities of weak home networks shared by numerous family members, and utilizing obsolete or inadequately equipped gadgets, such as laptops and desktop computers and routers. Some problems don’t just affect the staff at the headquarters. By 2020, teller transactions in the United States alone are predicted to fall by 40%, leading to the closure of more than 20,000 banks.
Financial institutions must concentrate on employee education playbooks for at-home situations and incident management techniques to prevent disclosing flaws that won’t be detected until it’s too late.
The Migration to Digital Banking is already Happening
People outside of the workforce are also converting to interactive settings. This transformation takes place along with modifications in consumer behavior. According to the Federal Reserve, bank branches were shut down three times a day for years before the pandemic. Millennials pushed this established industry into the digital era. One in seven millennials (27%) has never entered a traditional banking institution.
To ensure the ongoing development of digital banking, it is crucial to understand a variety of security and privacy challenges, such as the following.
- Highly sophisticated digital identity theft and fraud Ponzi schemes
- Cyberattacks can be of two types: ransomware and malware
- Confidential information leaks
- Escalation of privilege is a possibility
- observing all relevant laws and regulations
The only way to reduce these risks and other perils are to increase bank clients’ awareness of banking security.
That 87 percent of banking executives believe their cybersecurity problems have worsened over the past year shouldn’t be a surprise. Banks and other financial organizations will need more than one piece of technology to address this anxiety. Employees must participate in a fun, ongoing security awareness program that keeps up with the most recent security dangers.