Security threats in banking are becoming much more dangerous. Especially considering how varied and deceptive they have become.
Food for thought: In one of the biggest cyberattacks, the data of 3.2 million debit cards used in India was stolen after a malware was injected in a back-end banking system in 2016.
The government of India realizes just how deep a grave the banking sector in India is, and is already taking steps to lay the foundation of a secure foundation that can handle the escalating number of digital transactions.
Critical Security Challenges for Banks
The main obstacle banks face today is data. Daily transactions generate gigantic volumes of data, which need to be stored securely on breach-proof servers.
Financial networks have been targeted by cyber criminals for the past several years. Not only do these security threats in banking impend monetary losses, they can also disrupt the entire functioning of a bank as it fights against the intruder amongst their midst.
Transactions are now authorized using passwords and OTPs, which are extremely likely to be stolen or obtained illegally.
Another problem banks face in securing their infrastructure is the interlinking of several accounts to a single gateway. For instance, your UPI is linked to your Amazon account, which in turn is linked to your Prime account for music and OTT streaming. Credit cards are linked to these accounts, and are set to auto-debit. A breach at some other avenue may allow the hacker access to the person’s bank account and even to other customers’ data. Worrying, is it not?
This means banks need to add several layers of protection to their core services. Cyber security in banking needs to cover all the bases and not just the touch points of a transaction.
6 Security Threats in Banking You Should Know
Identity theft is a cyber threat in which a hacker steals someone else’s financial or personal data and uses it for their selfish, illicit activities. A data breach at a bank can lead to an inflammation in identity theft cases as the stolen bank data is sold on the dark web to buyers who’re willing to pay hefty amounts. The data can be used in all imaginable ways to wreak havoc.
This is a technological cyber threat in which a hacker mimics an official banking website and then uses spoofed email to bait victims into visiting these websites. Under some phishing pretence, the user is asked to enter their credentials in a valid-looking form, which ultimately leads to credential theft.
The username and passwords are harvested, either to be sold, or even misused by the hackers themselves to authenticate transactions and withdrawals.
Not all banking related scams are geared towards the theft of money. It is much more lucrative for a hacker to launch a full-scale ransomware attack on a banking system. In this type of cyber-attack, the hacker injects malware into a system by means of malicious payloads delivered via phishing emails. The malware corrupts all the data on the system, can spread to other connected systems, and then lock the user out of their own system. The hacker then demands a whole lot of money in exchange for granting access back to the system.
If the hacker had instead tried to steal money by duping bank customers, there were chances that:
a. The person realized they were getting duped, alerted the bank, and got the account frozen.
b. The bank noticed the steady rise in illegal transactions, launched the investigation, and exposed the hacker.
Also, banks immediately flag transactions in which a person withdraws a large amount of money in short bursts of transactions.
With ransomware, however, the pay-out is much more rewarding, making it a popular cyber-attack.
Business Email Compromise
Like the business world, the banking sector has also adapted to email communication. Banks often send email notifications of transactions, share sensitive data with the customers over email, and use email to communicate with other branches.
If a hacker taps into this stream of communication, they can hang around silently to identify patterns of email communication, spoof a valid email id, and then inject themselves into the conversation. Then, they can authorize payments, redirect it to their own bank accounts and then disappear without a trace.
At the base of a BEC attack is phishing, a method used by hackers to trick the victim into engaging with malicious links and attachments of a fraudulent email. Executed just right, phishing can lead to data theft, including a banking customer’s login credentials.
Threats From an Internal Employee
Dissidence from within an organization is nothing new. Disgruntled employees, unhappy with their salaries or company policies, will often plan to revolt from the shadows. An employee with a bone to pick with a bank can cause severe damage. This may include blatantly ignoring the security practices established within a bank, or even leaking data intentionally.
Even the most robust of servers are of no use if they are tied up handling spammy requests. That is exactly what a Distributed Denial of Service attack does. Scripts are run which make unrelenting requests to a bank’s infrastructure. This is more volume than the infrastructure can handle, and ultimately, it collapses.
Handling the security threats in banking
Audits and security checks
Gaps in the processes and protocols are often found to be precursors to cyber-attacks. One person does not follow the proper guidelines and ends up compromising the whole system. Or it’s not a human error, but a fault in the infrastructure, servers, or the network.
Whatever the cause, it is later realized – when it is too late – that the breach could’ve been prevented by timely audits and security checks
If you can employ a team of security specialists, they can schedule automated security checkpoints, perform penetration testing, and simulate real-life situations to see how your security holds up in the face of threats.
Don’t let a lack of knowledge be a cause of a cyber-attack. Educate employees on proper security practices, establish protocols that need to be followed, and also train them on how they should behave in case of a cyber-attack. Panic would be the worst possible reaction to such a scenario, and will usually make the situation worse. Teach your employees about proper email safety practices, authentication processes, and about detecting possible cyber breach attempts.
Implement a security solution
The banking world is by nature a very hectic sector. Banks cannot divert their attention from banking to security-related matters. Otherwise, they will lose out on customer satisfaction and efficiency. An on-call security team will help, but that is again an overhead.
Having an automated, third party security solution will be the most feasible and preferable way of implementing strict cyber security in banking. It can be in the form of email threat protection, filtering-based firewalls, or endpoint security mechanisms.
These security solutions can and should include anti-virus and anti-malware applications that scan all requests made to a bank’s server and warn against potential security threats.
Cyber security in a banking environment is not complete with just software security solutions. Hardware enforcement in a bank’s security fabric can block all incoming security threats. A rule-based firewall can identify malicious requests and filter them out.
MFA requires the user to type in a one-time password before she / he is authorized and proves to be a very effective solution for banking customers who use mobile and internet banking.
Biometrics are harder to circumvent because they depend on a person’s retina scans, thumbprints, or facial parameters. Duplicating these, although not impossible, is extremely tough, and can deter a majority of hackers.
Idle sessions – when a user is not using the banking system but is still logged in for later ease – can allow a hacker to gain illegal entry into the system. An auto-logout feature will trigger a session expiry after a certain time of inactivity.
Considerations for Cloud Security
Banking applications, like all major applications today, are served from the cloud. Some banks may even store data on cloud storage. Ensure that your cloud security provider follows the best security practices of cloud infrastructure.
Invest in effective endpoint security
Endpoint security is becoming more crucial owing to the many devices that communicate within and outside a network. Adding to that is the requirement to connect to data remotely, from not-so-secure personal devices like mobiles and tablets. Today, the masses use GPay, PayTM, and other digital payment platforms from a host of different devices. They have bank details stored for quick payments on platforms like Amazon and Flipkart. In these times, factors like visibility, proactive control, intelligent self defense, and self-healing make endpoint security effective.
Establish Strict Access Management Policies
Establish access levels for your employees and restrict data access only for employees who really need it. Keep some privileges strictly for the admin, who will use it proper discretion and won’t abuse the privileges.
Recovering from a security disaster
In case a data breach is discovered, have a plan in place for alternate methods of data protection. This will help you re-assure the customers, keep their trust in your bank, and reduce the downtime of tackling the security threat.