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Over the years, the banking sector has experienced significant transformation as financial services continue to evolve, robust cybersecurity practices are crucial to safeguarding sensitive information and maintaining trust.
This creates new challenges for banking and financial services leaders, calling for proactive strategies and strong cybersecurity measures as the sector undergoes digital transformation at a faster pace.
The advent of the COVID-19 pandemic has seen an accelerated shift towards contactless payments methods; NFC (Near Field Communication) payments, QR code payments present from the hawker selling vegetables next to our homes to any market stall in any mall.
This is not only convenient but also makes work easier and faster so that we can accomplish more with less effort.
Similarly, the rise in online shopping has necessitated integrating digital payment platforms as well as wallets into e-commerce sites. With time, clients are highly embracing digital means of transacting on e-commerce sites which has led to speedy amalgamation of secure payment gateways and mobile wallets into banking services.
Banking and financial services leaders have to take note of these emerging threats if they want their customers’ critical data protected, remain compliant with regulations and keep their customer’s trust.
As per the McKinsey’s insights, the majority of consumers view trust in data privacy and security as an extremely significant factor when choosing their bank (65%). Despite the importance they attach to the security and handling of sensitive financial data, consumers appear to instinctively trust banks and insurers without strong reason. The gap in consumers’ perception and the reality is perhaps exemplified by the fact that though one in four financial institutions reported to having been victim of a hack, only 3% of consumers believe their own bank has ever been breached.
While financial institutions, particularly banks, are spending a staggering amount of money securing their systems, the number and frequency of data breaches is still rising. The evolving nature of the threat and lack of clarity among leaders perhaps explains why, despite high levels of investment, 71% of organizations do not have a balanced security strategy nor strong data privacy practices.
In recent years, leaders in the banking and finance sector have found themselves in the crosshairs of increasingly sophisticated cyber threats. These threats span a wide spectrum, from organized cybercrime syndicates to state-sponsored actors, all aiming to exploit vulnerabilities within financial systems. Here’s a closer look at this dynamic landscape.
Leaders in the banking and finance sector have been targeted by cyber threats that are becoming increasingly complicated and focused. They range from organised cybercrime gangs to state-sponsored actors, which exploit vulnerabilities in financial systems to steal valuable information, cripple operations or demand ransoms for release. The nature of this threat is so dynamic that it necessitates constant watchfulness and well-matched cybersecurity approaches.
The International Monetary Fund (IMF) report notes that a recent case of cyber threat in the banking and finance sector indicating that the number of cyberattacks has increased more than twice during the pandemic.
It also reveals that one reason why criminals often target the financial sector is because it uses large amounts of data and transacts huge amounts of money. For instance, in 2023, a ransomware attack on a cloud IT service provider crashed 60 American Credit Unions at once.
Another example is of the Society for Worldwide Interbank Financial Telecommunication (SWIFT) system facilitates international money transfers. Cybercriminals have exploited vulnerabilities in SWIFT systems to steal funds or manipulate transactions. Notable cases include the Bangladesh Bank Heist (2016), where attackers stole $81 million, and the Ecuadorian Bank Heist (2015).
Another Notable example is NotPetya, a destructive ransomware strain, caused widespread damage globally. Ukrainian banks were hit hard, disrupting operations and affecting financial services. The attack spread through software updates and highlighted the importance of secure software distribution channels.
Emerging Cyber Threats 2024
There are assorted emerging challenges in Banking and Financial Service Industry between now and 2024 such as more advanced ransomware attacks/sophisticated phishing schemes/and deep fake development among others.
Each of these issues brings about different problems like proactive security strategies and rapid incident response capabilities to mitigate potential damage.
Ransomware Attack Finance Center
Ransomware attacks remain a major concern for the financial sector.
In this type of attack, malicious actors withhold sensitive information and demand payment of ransom in exchange for decryption keys. Recent events have highlighted the disturbing impact of ransomware on economic activity.
Phishing Attacks
Phishing still remains one of the primary strategies used by cyber criminals to obtain unauthorized access into financial systems. An example of phishing attack is spear phishing where attackers target specific people within the financial institutions with messages that are very personal and believable. To mitigate the risk of phishing attacks, it is advisable for leaders in Banking and Financial Services Industry to invest in strong email security programs, multi-factor authentication and continuous cyber security awareness training.
Supply Chain Attacks
The relationships between different components within the supply chains of Banking and Financial Service highlight how vulnerable systems can be when attacked by cyber criminals who manage to penetrate other areas first due to these linkages.
A supply chain attack can compromise critical data or disrupt a business through third-party vendors or service providers. The leaders in the Banking and Financial Services (BFS) industry must implement proper supply chain risk management — this involves conducting regular security audits and ensuring clear cybersecurity policies for all stakeholders involved in the supply chain. Cloud Security Investment Leader is an essential role to be taken by Banking and Financial Services organizations, given that many are now adopting cloud computing solutions for scalability and operational efficiencies. A robust cloud security infrastructure should be established, as cloud security challenges typically include a data breach plus misconfiguration and unauthorized storage of financial data in the cloud. Therefore, encryption should be prioritized along with strong access control and ongoing management of the cloud environment to protect against evolving cyber threats that could materialize at any point.
Nucleus Software, in its efforts to avoid phishing attacks, takes into consideration such techniques as user education or anti-phishing tools and security measures which tends to be pre-emptive aiming at identifying and then eliminating the possibility of these attacks. In addition, they can consider adopting strong passwords and enabling two-factor authentication.
To sum up, the digital evolution rate in the banking and financial services sector increases along with intricacies of cyber threats. The changing environment requires that BFS decision makers stay watchful and take initiative in their cybersecurity approach. Awareness and readiness towards emerging threats like high-level ransomware plus a sophisticated use of phishing — coupled with more adoption of deepfake technology — helps organizations to secure sensitive data, ensure regulatory compliance, and retain customer trust.
Nucleus Software has Future-proofed technology stack, which is Continuously upgraded across a Service Oriented Architecture, Secure with inherent resiliency Across any cloud & on-premise,
Nucleus Software’s FarEdge, an AI powered platform empowers the complete stack with Built-in intelligence that boost productivity, improve user experience, enhance security and enable informed, intelligent decisions. One of its features include, Fraud Detection – Real time ingesting and processing of transactional and environmental data for early detection of threats.
In summary, Nucleus Software evidences strong commitment to cybersecurity for banking and finance leaders, by the way of investments in proactive risk mitigation and state-of-the-art security solutions to keep pace with the changing threat landscape. With its combination of cutting-edge technologies and risk adjusted regulatory standards, Nucleus Software is helping banks & non-banking entities take care of their data sensitive organisations while ensuring business continuity in a secure and competitive landscape.
