Cyberattacks are a major threat in the digital world. In the banking and financial services industry, customer data is a valuable target for cybercriminals, who use malicious software to alter computer code, logic, or data—resulting in disruptive consequences.
The BFSI sector is extremely prone to cyberattacks and is affected by them almost three times more than other verticals. Banks possess data—notably financial information—of millions of users. Using this data, cybercriminals can engage in extortion, theft, or fraud. Banks face cyberattacks on a regular basis, and these attackers use various techniques to try and get through—some attackers even use hard drive data to inflict damage to banking processes. Hence cybersecurity in the banking and financial sector is crucial.
The use of IoT-connected devices and sensor-based technologies has also created new avenues for cyberattacks. Cybercriminals can use cloud-based botnets, take over processing power, exploit Near Field Communications, deploy Distributed Denial of Service (DDoS) attacks through the cloud, and attempt to bypass multi-factor authentication.
Some of the other cybersecurity threats in the banking and financial sector include:
Unencrypted Data: If sensitive data is stored without encryption or is improperly encrypted, it will be easily accessible if stolen.
Inadequate Security: Automation technology and connected devices can be tampered with if they are unprotected.
Unprotected Third Party Services: Third-party services are prone to cyberattacks that attempt to access sensitive data. Hence, they should be protected using cybersecurity solutions.
Unsecured Mobile Banking: The use of mobiles in the banking sector has increased. This gives attackers a way to access data, as mobile devices have less complex security systems.
New Forms of Hacking: Attacks can manifest in different forms, and attackers may delete consumer data, change it, or hold it hostage. Cybercriminals constantly come up with new and innovative ways to exploit financial data.
End users are the weakest point in any financial institution. They form an infinite attack surface for phishing (email, VoIP), malware (drive-by, targeted), and other security vulnerabilities. Blockchain technology can be useful to help mitigate the risk of cyberattacks as well as to reduce banks’ infrastructure costs. This technology does not have a ‘hackable’ entrance or a central point of failure; thus, it provides more security when compared to various database-driven structures.
Blockchain technology comes with the following advantages:
- Addresses the issue of ‘lack of trust’ between counterparties
- Eliminates human intervention in the authentication process
- Provides decentralized storage
- Cryptographic security protects storage from unpermitted modifications
- Improves data integrity and digital identities
- Secures IoT devices
- Effectively counters DDoS attacks
- Provides accountability for every transaction
- Provides synchronized, consensus-based third-party validation for every transaction
With the increasing impetus to digitization and digital payments, a weak cybersecurity system could easily lead to financial institutions losing time and money. If sensitive customer data lands in the wrong hands, it could be severely exploited, causing damage to the customer as well as to the financial institution.