Cyber Security in the Banking Sector: Importance, Risks and Regulations

To help banks better protect their networks against growing internal and external threats – this article will further analyze the current cybersecurity risks that banks must face. face, along with strategic solutions that banks can use to protect themselves against attacks.

The importance of cybersecurity for banks

With the rapid development of technology, the risk of sensitive personal information such as bank accounts and passwords being attacked or accessed by bad guys is higher than ever, so maintaining a Safety systems have become extremely important for banks.

Customer data security is one of the leading and prerequisite factors, affecting the existence and reputation of the bank. Therefore, banks need to be constantly vigilant and implement advanced security measures to protect against security threats when accessing the internet or participating in online banking activities. Banks also need to ensure that they use the latest software updates and that all staff are trained on how to handle customer data and banking transactions securely.

The biggest risk to banks' cybersecurity

In recent years, the rate of cybercrime has increased to the point where it is considered the biggest threat to the financial sector. As hackers' methods and tactics become more sophisticated, consistently defending against attacks also becomes increasingly difficult.

Below are the most prominent cybersecurity threats in the banking sector.

Phishing attack

This is a case where hackers create websites impersonating reputable units, then trick users into providing them with personal information. Typically, this form is done through email and third party messaging services. In this case, hackers will often impersonate bank websites or online transaction sites, e-wallets, etc. and trick users into providing sensitive information such as accounts and login passwords. , OTP verification code,...

Distributed Denial of Service (DDoS) Attack

A distributed denial of service or Distributed Denial of Service (DDoS) attack uses a botnet - a collection of interconnected online devices - to generate large amounts of traffic to make the site website becomes unavailable to legitimate users. Unlike other cyber attacks, the goal of a DDoS attack is not to compromise website security. Instead, the goal is to make a network resource, server, or application unavailable to the target audience. A DDoS attack can also be used to hide other malicious activities and disable security devices to compromise a target's security. Notably, during the pandemic, the number of DDoS attacks increased by 30% for the financial services industry.

Data is not encrypted

As cybercriminals become more sophisticated, data threats become even greater. It is not enough to simply protect the data access facilities, the data itself must also be encrypted. According to a report by multinational computer technology corporation IBM, the average loss of a data breach is 4.35 million USD. This value will certainly increase in the future when cyber attacks occur every day, causing enormous damage to businesses and users. However, with today's powerful encryption methods, these costs can be reduced or avoided altogether.

Ransomware

Ransomware is malware used by cybercriminals to encrypt important data and require the data owner to pay to access that data. This form of cyber attack is a serious threat to banks. In the age of cryptocurrency, cyber criminals are especially interested in finding vulnerabilities in decentralized systems, from which they can easily steal funds from transaction systems.

Manipulating data

Altering and editing digital information is called data manipulation. Cyber criminals use a variety of attack methods to penetrate networks, gain access to software or applications, and alter data. By manipulating data instead of stealing it, hackers can be more successful and cause serious damage to organizations or individuals. This is a sophisticated cyber attack because it can take a long time for users to realize that their sensitive and confidential data has been changed and that it cannot be changed back.

Fake

Spoofing is a form of cyberattack in which criminals disguise their identity as a reputable target to steal sensitive information or money. Banks face the constant threat of phishing attacks that can have serious consequences for their customers and operations. Additionally, man-in-the-middle attacks are increasingly attracting attention, in which hackers intercept communications between customers and banks to gain access to personal information, redirect payments, or even make a denial of service attack. So, it is therefore important for banks to remain vigilant and put in place safeguards to protect themselves from these threats.

Cybersecurity regulations for banks impact FinTech

Thanks to FinTech regulations, financial institutions in general, and their cybersecurity managers in particular, can use them to evaluate their own security measures as well as those of their suppliers. Additionally, FinTech regulations also make it easier for financial institutions to identify the processes and procedures needed to mitigate cybersecurity risks.

Below are the three most common financial compliance requirements related to cybersecurity in the banking sector.

NIST

NIST has become the leading standard for assessing cybersecurity, identifying vulnerabilities, and complying with cybersecurity laws, even when compliance is not required. NIST developed 110 requirements that cover various aspects of enterprise IT processes, policies, and technology. These requirements address access control, system configuration, and authentication methods. Additionally, cybersecurity and incident response protocols are also defined. Meeting all of these requirements ensures that your network, systems and personnel are effectively prepared to securely manage any controlled unclassified information (CUI).

GDPR

The General Information Protection Regulation (EU GDPR) is a security framework designed to protect the personal data and privacy of EU citizens when conducting transactions between EU member states. Any company that processes the private data of EU citizens, whether manually or automatically, must comply with GDPR. This regulation highlights a set of security principles for data processors and data controllers to ensure the security of all user data throughout its lifecycle.

ISO/IEC 27001

The globally recognized ISO/IEC 27001 standard helps reduce security risks and protect information security systems (ISMS). This is an internationally recognized set of security policies and procedures that are essential to protecting an organization's most important assets such as customer and employee personal information, brand image, and customer service. signs and much more information.

As this is the international standard for cybersecurity and data protection, financial institutions that want to propose their superior cybersecurity solutions to stakeholders must first achieve ISO/Certification certification. IEC 27001.

Epilogue

For banks that store large amounts of personal data and transaction lists, cybersecurity solutions and processes are an important must-have. Financial institutions need to pay more attention to cybersecurity risks as well as choose smart strategies to protect themselves against cybersecurity attacks that are becoming more and more sophisticated.

Reference source: Ph.D Ina Nikolova

Compiled by the author group DTSVN - Digital transformation solutions for the Finance and Banking industry.

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