Protecting Your Money: How Financial Institutions Are Addressing Cybersecurity Risksby Derek Alam Sr Digital Marketing Executive @ Mind Digital Grou
The financial services sector has reaped numerous benefits from digitalisation, including increased productivity, efficiency, customer experience, and innovation. Unfortunately, with the good, come the bad: cyber attacks. The automation of almost all financial processes has increased cybersecurity threat levels.
Daily, financial institutions deal with highly sensitive personal data; this data can easily be used for financial fraud, which is why they face ongoing cybercrime threats. When it comes to cyber attacks, the financial services sector has been one of the hardest hit.
As a result, financial institutions have become more proactive in mitigating potential cybersecurity threats by integrating cybersecurity resilience into their overall risk management efforts.
Rising to the Cybersecurity Challenge
The Impact of Technology
Protecting critical systems and data is a continuous process, not an end state. To consistently do so, banking institutions are relying heavily on technology to address the common threats they face and are currently focusing on incident prioritisation, securing cloud services, and mitigating compromised insider threats.
Some of the ways this translates to the end-user of digital financial services include:
● Fraud Alerts
Almost all global financial service providers have a monitoring system in place that acts as an asset protection tool by tracking signs of unusual activity on a user account. This tool assists banks in quickly detecting fraudulent and unauthorised use.
As soon as a threat is detected, a notification is sent to their customers' phones, emails, or text messages informing them that their accounts may have been compromised. In most cases, when a bank's fraud alert system is triggered, critical data transfer is immediately initiated to protect user data before it is accessed or damaged.
● Biometrics and Multi-factor Authentication
Passwords and usernames are notorious for their flaws. As a result, banks are now requiring their customers to use multi-factor authentication when accessing digital services. This is accomplished by requiring biometric authorisation (facial recognition, fingerprints, iris scan, or voiceprints) after logging in with a username and password, or by requesting an OTP (one-time-password) and manual access approval before granting full access to a digital financial service account.
● Barrier to Entry: Limited Login Attempts
This is the bank's defence against a brute-force attack. A brute-force attack occurs when hackers attempt to gain access to a system repeatedly using multiple password combinations. By locking users out after a small number of incorrect password entries, limited login attempts reduce the risk of a brute-force attack.
● End-to-End Encryption
Stolen data cannot be used if it is unreadable, this is the philosophy guiding the end-to-end (E2EE) technology. This is why financial institutions are incorporating end-to-end technology on the digital platforms where they communicate with their customers: websites, apps, emails, live chat. Making certain that no one who is monitoring a network can see the content of a message sent over it.
The Role of Regulators
To ensure the proper protection of sensitive data and secure operations, international and local financial regulatory bodies have established security compliance requirements for financial institutions. It is the goal of these institutions to establish a set of robust cybersecurity practices that supports global economic stability and protects financial consumers, especially as cyber attacks become more sophisticated.
Financial institutions are required to comply with two primary global data security standards: PCI-DSS (Payment Card Industry Data Security) and ISO/IEC (International Organization for Standardization/International Electrotechnical Commission).
● PCI-DSS (Payment Card Industry Data Security Standard)
The Payment Card Industry Data Security Standards is an international data security standard designed to curb fraud by increasing credit card information security. Financial institutions are required to follow the PCI-DSS standards if they transmit, process payment, or store customer data from any of the leading credit card providers: MasterCard, Visa, Discover, Japan Credit Bureau(JCB), and American Express.
● International Organization for Standardization/International Electrotechnical Commission (ISO/IEC) 27001
The ISO/IEC 27001 standardization regulations are an aspect of the broader ISO/IEC 27000 collection of cybersecurity regulations which outlines proper procedures and recommendations for regulating cybersecurity risks and financial data.
Top Cybersecurity Best Practices Adopted by Financial Institutions
1. Creating a Cybersecurity Policy
A cybersecurity policy is a summary of all the requirements that a financial service provider develops to outline an effective cybersecurity routine and maintain a certain level of data security over time.
2. Periodic Risk Assessments
Periodic risk assessments provide financial institutions with full visibility into their IT infrastructure, assisting them in detecting and prioritising the mitigation of vulnerabilities and weak points that cybercriminals can exploit to compromise their corporate network.
3. Ongoing Risk Management of Third-Party Risks
Subcontractors are sometimes granted access to the personal data of financial services users. However, a third-party error can result in a major data breach. As a result, banks are closely monitoring the third parties with whom they collaborate, employing approaches based on strict access limitations such as the zero trust model, enforcing multi-factor authentication, and implementing sophisticated privileged access management solutions.
4. Continuous User Activity Monitoring
User activity monitoring is critical for detecting and preventing both outsider and insider threats. It is also a critical requirement of many cybersecurity regimens, such as PCI DSS and SOX.
The Role of the Customer: How to Safeguard Your Digital Financial Assets from Cybercriminals
Even though financial institutions are working tirelessly to ensure the security of the personal data they are entrusted with, there will always be risks associated with sharing sensitive information with a digital financial service provider, whether that’s logging into a digital banking platform or entering your credit card information online.
What to do? Reduce your chances of becoming a victim of bank fraud by following these tips:
● Install a good antimalware program on your internet-enabled devices.
● Use strong, one-of-a-kind passwords.
● Activate multi-factor authentication.
● Regularly review your bank statements and opt in for fraud alerts.
● Do not conduct financial transactions, such as a money transfer, when you are using a public computer or Wi-Fi network. If you must, use your smartphone as a personal hotspot and ensure nobody is looking when you are inputting your login information.
● Keep an eye out for phishing emails. These are emails that appear to be legitimate bank requests. They frequently appear as new service offers, such as the introduction of a cashback credit card, along with a link to claim these offers. Whitelist your banking provider's email address and double-check the sender's email address before clicking on any email link.
One More Thing
Remember to use cybersecurity best practices even at home to stay safe on all fronts.
Created on Sep 10th 2021 07:02. Viewed 1,951 times.