Cyber-attacks and the Risk of Bank Failures
Banks handle extremely sensitive and extensive financial information from numerous customers, making the banking industry a veritable goldmine for cybercriminals. While most industries around the world are threatened by cyber threats, the banking sector has always been the hardest hit. Naturally, this causes significant damage due to the environment in which the banking sector operates they deal in billions of dollars every day, trading with a plethora of people and businesses all over the world.
Examples of cyber-attacks in banks.
There have been many instances of cyber-attacks on banks and other financial institutions over the past few years. Some examples include:
- In 2020, hackers launched a ransomware attack on Flagstar Bank in the United States, posting personal information about the bank’s customers online in an attempt to extort money from the bank.
- Following an extended DDoS attack on a network provider, the New Zealand Stock Exchange was forced to shut down operations in 2020.
- In 2021, the online stock trading platform Robinhood experienced a data breach in which a cybercriminal gained access to the personal information of 7 million customers.
- In 2021, the Ecuadorian bank Pichincha Bank was targeted by a cyber-attack, causing customers’ access to banking services to be disrupted.
Cyber-attacks challenges banks face
It can be difficult to implement cybersecurity mitigation strategies in the banking sector. Among the major challenges that banks must overcome are:
- A cybersecurity talent gap occurs when the number of appropriately trained professionals far outnumbers the demand.
- Employees whose cybersecurity awareness training is either insufficient or out-of-date and does not take new risks into account.
- Inadequate budget for dealing with cybersecurity threats.
- Employees’ use of weak credentials makes it easy for hackers.
- Those looking to exploit mobile banking devices and apps are targeting them.
Solutions to cyber-attack challenges in banking
Of course, banks and financial institutions can still take precautions to protect their systems from common cybersecurity threats in financial services. This includes the following:
- Overcoming the talent gap by collaborating with other organizations and security partners who provide managed services.
- Investing in detection and response tools that will allow you to be proactive and prevent an attack.
- Implementing consumer education programmes to ensure that customers do not reveal sensitive information to cybercriminals.
Importance of communication
When it comes to raising cybersecurity awareness and preventing financial cybersecurity incidents, communication is critical in banks and other financial institutions.
Create appropriate internal communications strategies to keep employees informed about their obligations to keep data safe, report breaches, be aware of new threats, and make sure you have the tools and resources to deliver the information in a compelling and engaging manner.
Some of the ways banks can achieve this are through internal financial communications, including:
- Using corporate wallpapers and screensavers to alert employees to security concerns
- Provide security training and quiz employees on a regular basis to determine their knowledge of cybersecurity issues.
- Provide employees with information about emerging threats so they can remain vigilant.
- Send regular hints and tips on best cybersecurity practices – don’t overwhelm with too much information at once.
- To help reinforce your messages, use a variety of communication channels.