FinTechCyber Security & FraudThe importance of cyber security in banking

The importance of cyber security in banking

The importance of cyber security in today's banking environment, by Prem Khatri - Vice President of Operations, Chetu, Inc.

The banking sector has been under attack for hundreds of years. First, it was the physical theft of monies. Then it was computer fraud. Today, it’s not only cyber fraud but hacks into servers to obtain a customer’s personally identifiable information (PII). Hence, the reason why cyber security in banking is of utmost importance. As individuals and companies perform most transactions online, the risk of a data breach increases daily. This is why there’s a greater emphasis to examine the importance of cyber security in banking sector processes.

The importance of cyber security

The obvious reason for the importance of cyber security in banking sector transactions is to protect customer assets. As more people go cashless, activities are done through online checkout pages and physical credit scanners. In both situations, PII can be redirected to other locations and used for malicious activities.

Not only does this affect the customer. It also greatly harms the bank while they attempt to recover the data. When it’s taken hostage, the bank might need to pay hundreds of thousands of dollars to release the information. In turn, they lose the trust of their customers and other financial institutions.

That’s not the only thing that happens when steps for cyber security banking aren’t implemented. The customer needs to cancel all their cards and start new accounts – possibly at another bank. And though their funds are protected by the FDIC, it doesn’t stop criminals from trying to use their PII.

Three risks presently associated with banking on the web

The above examples account for a small percentage of potential problems with cyber security in banking. Some of the other items to be concerned about include:

  • More risks from mobile apps — More individuals access their bank accounts on mobile apps. Many of these people tend to have minimal or no security, and this makes the potential of attack much greater. Hence, banking software solutions are required at the endpoint to prevent malicious activity.
  • Breaches at third-party organizations — As banks have upgraded their cyber security, hackers have turned to shared banking systems and third-party networks to gain access. If these aren’t as protected as the bank, the attackers can get through with ease.
  • Increased risk of cryptocurrency hacks — In addition to standard funds, hacks have increased in the growing world of cryptocurrency. Since the sector is unsure how to implement cyber security software for banking in this ever-changing market, the ability for attackers to grab large amounts of this currency is greater. Especially when it quickly jumps in value.

Safeguard against attacks with secured software

When you look at the on-going state of security on the internet, you must consider enhancement or complete replacement of your current protection applications. Here are some things to look at in the world of banking software development.

  • Security audit — A thorough audit is imperative before any new cyber security software is implemented. The review reveals the strengths and weaknesses of the existing setup. Furthermore, it provides recommendations that can help save money while also allowing for the proper investments.
  • Firewalls — Cyber security banking configuration does not only include applications. It also requires the right hardware to block attacks. With an updated firewall, banks can block malicious activity before they reach other parts of the network.
  • Anti-virus and anti-malware applications — While a firewall upgrade increases protection, it won’t stop attacks unless anti-virus and anti-malware applications are updated. Older software might not contain the latest rules and virus signatures. In turn, it can miss a potentially disastrous attack on your system.
  • Multi-factor authentication — This protection, also known as MFA, is extremely critical to protect customers who utilize mobile or online apps to do their banking. Many users never change their passwords. Or, if they do, they make small changes. Applying MFA stops attackers from reaching the network because it asks for another level of protection. For instance, a six-digit code sent to a customer’s cell phone.
  • Biometrics — This is another version of MFA even more secure than a texted code. This form of authentication relies on retina scans, thumbprints, or facial recognition to confirm a user’s identity. Though hackers have accessed this type of authentication in the past, it is more difficult to accomplish.
  • Automatic logout — Many websites and apps allow a user to stay logged in if they allow it. Thus, they can access their information at any time without entering their login credentials. However, this also permits attackers to easily obtain your records. Automatic logout minimizes this by closing a user’s access after a few minutes of inactivity.
  • Education — All of the above measures can increase cyber security in the banking sector. Nevertheless, they can’t help if customers continue to access their information from unprotected locations or improperly protect their login credentials. This is why education is important. When banks notify their customers of consequences related to these vulnerabilities it may move them to change their habits for fear of losing their investments.

Conclusion

If you require an overhaul of your banking software solutions let Chetu assist. They offer custom banking software development, cyber security solutions such as secure socket layers (SSL) for standard TCP/IP connections. They also help decrease malicious activity via MFA, One-Time Passwords (OTP), Single Sign-On (SSO) and SSH-based File Transfer Protocol (SFTP). Contact them with any questions you may have or ask for a consult.

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