Web application and API crimes against banking firms soared by 257 percent in 2022, according to statistical analysis from Akamai. The cost of cybercrime in this industry is also among the greatest; according to IBM, in 2022, the usual cost of a data breach in this industry was $5.97 million, more than a million dollars more than the national average.
Summary
- Introduction
- Exclusive Industry Insights
- Is online banking safe enough?
- Why is IT security important in banking?
- Strategies for Enhancing Security in Online Banking
- 12 Latest tech innovations in security solutions for digi-banking
- Top 9 IT crimes which usually happen with banks
- Conclusion
Introduction
While banks have traditionally kept a lot of data about their clients’ personal and financial affairs, all of that information is now readily available to anybody with access rights. Over the last several decades, the development of financial technology has produced a number of breakthroughs and advancements, including wire transfers, credit/debit cards, internet banking, and mobile payments.
In order to adapt to these developments, banks have to not only improve their systems but also adjust the way they operate in order to maintain security while introducing new technologies. These days, it’s also crucial to safeguard sensitive data and put security measures in place to thwart fraudsters’ assaults, such as phishing and malware efforts.
Fighting cybercrime is a top concern, particularly in light of the increase in digital transactions that have given birth to potential dangers including OTP access, phishing, UPI scams, and more. On the strength of their commitment to a digital India, major financial and technological organizations are reviewing their security protocols. The only way to stop this is for the banking industry to look closely at how they are being cheated and take quick but well-considered action to stop it.
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Despite increased law enforcement, ransomware will continue to spread. Penetration tools are being used by hackers to enable real-time customization of assaults. This expanding pattern causes collateral harm to the originally intended victim, necessitating the use of a collateral damage strategy. Attackers increasingly target an organization’s clients and/or business partners and demand ransom payments in addition to obtaining sensitive data from them and threatening to make it publicly available unless a payment is made.
In order to deceive clients nowadays, criminals are using modern technology. The newest technologies are used to commit frauds such as SIM swaps, false KYC threats, tricking consumers into downloading malware, hacking banking passwords, and screen recorder attempts. Banks must use cutting-edge technology to combat this while ensuring the security of their clients. The current need is to work with cybersecurity companies that are well aware of how fraudsters operate. These businesses invest their time and money in developing innovative technology that will protect the banking industry.
Exclusive Industry Insights
Frank Sandelov, CEO at Cardlab ApS contributed his insights to Global Fintech Series which forms the original content for this website. His views were enthralling.
I have tried to distillate my thoughts around the subject on ” How can Banks Stay Competitive with a Secured IT Security Infrastructure? “, and it is honestly a very good question as there are challenges with security, user experience, the cost level, and on top of this the dependency of the big payment providers.
So my take on this in a few words would be that “Banks will need to become their own payment processors and have a secure tokenized user system in place which can be done by issuing biometric cards with tokenized identity and providing and implementing their own backend authentication system. This will allow a much faster and more secure MFA process cheaper to the bank and more customer friendly. This will enable the removal of online fraud, cut payment processing costs, protect the IT infrastructure, and enhance the customer base by a far better and more convenient user experience” When we talk with clients in the financial sector we see that this is what is needed and with the “Authentication as a Service” solution that we provide this can be implemented with the banks and can help them maintain their client base as we remove the need for SMS, different communication links to verify your transaction, use of unsecured online Apps etc.
There is a lot of costs to be saved and at the same time build a much more robust system where you have Multi-Factor Authentication without the need to use of sorts of delaying communication lines and actually also removing the need to remember passwords. For the user, it becomes a much more seamless experience and the cost on the banks will be reduced significantly in addition to removing online fraud as all transactions become tokenized as if it was a card present transaction with added tokenized identity provisioning.
Is online banking safe enough?
In the twenty-first century, cybercrime has become one of the deadliest retaliation tools anybody can employ to threaten or defraud someone. As long as one takes sufficient precautions to safeguard their accounts and ensure that their bank employs industry-standard security technologies, online banking should be secure.
The types of financial scams that we see nowadays are equally deadly and varied in character. The most frequent one, while still highly dangerous, is when a customer’s password is compromised. Given that a lot of people do business via mobile devices, they are highly susceptible to all types of assaults. In a scam known as a “SIM swap,” a customer’s SIM card is copied without their knowledge. Large sums of money are often moved via this scam into several bank accounts, some of which may be difficult to locate. Additionally, keyloggers directly target customers’ bank accounts and endanger their financial security.
Other significant dangers that concern the banking industry include fraud involving transaction authorization, social engineering attempts, and account takeover. These dangers directly impact banks and consumers, and they provide compelling evidence in favor of implementing cutting-edge cybersecurity safeguards.
Keeping an eye out for banking fraud is another way to keep your money secure. For instance, con artists often conduct phishing schemes, in which they send emails or texts purporting to be from financial institutions in an effort to trick gullible customers.
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Advanced cybersecurity technology may assist protect complicated transactions; retail banking eSignature systems can digitize internal as well as customer-facing agreement procedures using electronic signatures. Customers and workers both benefit from improved experiences because of this. Additionally, passwordless authentication makes it possible for consumers to transact with the bank without having to depend on passwords.
The notification may ask for your bank password or Social Security number and indicate there is an issue with your account. Alternatively, it can state that your account information is required in order to send $100,000,000 to you. If you respond, the criminal may use the information to access your account and make purchases or withdrawals without your permission. A link or email that seems too good to be true should not be clicked.
Fraudulent account takeovers may be prevented by using a multi-layered security strategy offered by cybersecurity companies. By leveraging out-of-band authentication methods, such as user-friendly SMS and push combined with visual cryptogram technology to authenticate transactions, man-in-the-middle attacks may also be prevented. Banks may get help from cybersecurity companies to comply with ever-changing compliance regulations. Using transaction signing services, which are quite good at thwarting social engineering assaults, banking transactions may be protected. These are just a few of the essential, cutting-edge strategies for outwitting con artists.
Why is IT security important in banking?
If their data is compromised due to inadequate security measures, they may lose customers. Time and money are usually lost when a bank’s data is stolen or hacked. It could be uncomfortable and time-consuming to recover from the same. reduce the possibility of cyber attacks and data theft in information technology systems. To stop unauthorized access to sensitive information, implement security safeguards. Avoid service interruptions, such as denial-of-service assaults. Defend IT networks and systems from outsider exploitation.
Strategies for Enhancing Security in Online Banking
1. Pick a company that adheres to the highest security standards in the business. You most likely already have in mind a bank or credit union with cheap fees and high-interest rates for your accounts. Put “top-notch security” at the top of your list. Then, take precautions like using firewalls, monitoring for fraudulent activity, and encrypting your website to protect your online accounts. The bank’s website or terms and conditions may provide information about its safety measures. Contact the bank directly if you’re having problems locating this data.
2. Multi-factor authentication should be used. MFA operates as follows: The login process at your financial institution will now require an additional verification factor, in addition to your username and password. A fingerprint scan or a one-time code texted to your phone are two examples of biometric authentication. To put it another way, it’s an extra safeguard that is harder to compromise than a password.
You should have no trouble finding a bank or credit union that meets your needs as many of the major online banks adhere to these requirements.
3. If you need to do some private banking, don’t use a public network. You can never be sure who is viewing the information you transfer over a public network unless every website you visit uses encryption. The security of your home network is unparalleled. If you need to check in when away from home but don’t have access to Wi-Fi or a VPN, think about using your mobile data plan instead. Make sure the browser’s URL starts with “https:” regardless of the login method you use to ensure a secure connection. The presence of the “s” implies that the page can be viewed without worry.
4. Always use up-to-date anti-virus software. Make sure the ones on your personal computers and mobile devices are up to date.
5. Use lengthy, complex passwords. Use a complex combination of letters, numbers, symbols, and other characters that would be difficult to guess. A typical minimum length for a password used on a government website is between 12 and 16 characters. However, the longer and more intricate your password is, the harder it is to break and the more likely it is to give security against hackers. Consider employing a password manager, which can help you generate and save secure passwords.
6. Take the use of text message notifications. Customers at many financial institutions can opt to get SMS or email notifications if a certain threshold is reached or a certain amount is transferred from their accounts. Customers can prevent additional fraudulent behavior by contacting their bank promptly if they notice a purchase or transfer they did not make. If a customer spots unauthorized charges on their bank statement, they have 60 days from the statement’s date to file a dispute.
12 Latest tech innovations in security solutions for digital-banking
1. Data protection
You engage with the bank online when you use digital banking to make a transaction. Banks can prevent unauthorized disclosure of sensitive information by applying sophisticated encryption to data.
2. Login security
Many consider the login procedure to be a possible security threat’s “grey area.” Banks are tightening up this exercise, however, by including features like session timeouts for inactive websites, the ability to disable multiple simultaneous logins, multilayer login processes, etc. Although they are features, the overall tendency is to make your online banking experiences stronger.
3. Certifications
Replica and fraudulent websites have in the past posed serious issues for consumers of digital banking. Customers may be confident they are on a legitimate banking website and not a fake by using digital certificates. Along with this, banks now provide enhanced Extended Validation Secure Sockets Layer (EV SSL) certificates to make sure clients are aware of the legitimacy of other websites.
4. Artificial Intelligence
Several financial institutions are employing AI and ML to better detect and prevent anomalies and suspicious patterns in their back-end operations. With the use of AI, a bank’s security and data analytics tools can better detect anomalies.
5. Creating a digital account
Remote bank account opening has grown more commonplace nowadays as a result of the epidemic. Banks have moved from using digital technology just in part to fully digitizing the account opening procedure, making it easier for clients to establish an account from any location.
6. Deployment of API
A secure connection between various applications is made possible via the application programming interface.APIs are becoming a crucial growth factor in the business-to-business banking industry. Banking services are being integrated into corporate customer systems in an increasingly seamless manner.
7. Collaborative video tools
The epidemic has also hastened another trend, which is the most recent development in banking technology: video communication tools. If clients can contact the proper person with only a click, it might significantly alter the user experience.
8. Automating processes using robots
RPA may automate repetitive manual operations and boost their effectiveness. In these procedures, it is being utilized to replace manual labor and get rid of human mistakes. Automation has the potential to provide banks a competitive edge.
9. Utilising the cloud
Organizations have been using cloud technologies to increase productivity and enhance customer service. By offering data-based insights, this cutting-edge technology may help lower security and business continuity concerns. Cloud computing services provide banks with applied analytics to achieve this.
10. Modernized security measures
Banks are constantly enhancing and updating their security tools, such as firewalls and anti-malware programs. Through the use of technology, new financial security solutions are better able to guarantee intrusion detection and intrusion prevention.
11. Traces of audits
A statement or passbook with a history of transactions was always accessible. Additionally, banking systems keep a record of every action a consumer performs when interacting with the systems in an audit trail. The time of the conversation is recorded together with the specifics of the interaction, regardless of whether the consumer uses phone banking or Internet banking. Daily backups are made of this data, which is never totally deleted but rather preserved at predetermined intervals.
12. Constant Conversation
In addition to the monthly account statements that are prepared and given to clients, banks also routinely communicate with customers about system changes, the introduction of new authentication methods, etc. Customers may also establish alerts and limitations based on various criteria to make sure they are notified if any unforeseen action occurs about their accounts. Although there are many communication options, the setup is adaptable to suit the convenience of the users.
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Top 9 IT crimes which usually happen with banks
1.Hacking
Hacking is a kind of cybercrime that entails getting unauthorized access to a system or making an effort to get beyond security measures by breaking into user accounts or banking websites. However, under Sections 379 and 406, as well as Section 66 and Section 43(a) of the Information Technology (Amendment) Act, 2008, a hacker may be prosecuted. If the crime of hacking is proven, the convicted may receive a sentence under the IT Act of three years in prison or a fine of up to five lakh rupees, or both.
2. Viruses
Viruses are self-replicating programs that spread themselves by embedding new instances of themselves in other programs or files. A computer virus is a piece of code that, if installed in an executable file, causes the file to behave in an unexpected way. By connecting itself to executable files like program files and operating systems, it spreads. Worms, on the other hand, are programs that can duplicate themselves and transmit copies to other computers from the victim’s computer. Loading the executable file might result in new copies of the virus being formed. Worms reproduce and transfer copies of themselves from the user’s computer to other computers; they do not alter or delete any data.
3. Keylogging
Keylogging or keyboard capturing is the term used to describe this practice. Keylogging refers to the practice of recording (logging) the keys touched on a keyboard while the user is unaware that their actions are being monitored.
4. Phishing
Private information, such as Debit/Credit Card numbers, Customer IDs, IPINs, CVV numbers, Card expiration dates, and so on, are obtained via phishing scams, which include sending emails that seem to be from a reliable source. Instant messaging and email spoofing are used to carry out phishing. In this sort of crime, con artists pose as bank employees and produce a link that takes the victims to a false page that resembles the real bank website. The stolen data is subsequently used to carry out fraudulent transactions on the client’s account. These days, phishers also utilize SMS (Smishing) and mobile (voice) phishing to carry out similar crimes.
5. Spyware
The most popular method for acquiring Internet banking login information and exploiting it fraudulently is spyware. Spyware gathers or sends data between systems and websites to carry out its operations. Industry-standard antivirus systems identify and remove this sort of malware, largely by stopping the download and installation before it infects the PC. It is often installed by fraudulent “pop-up” adverts to have the software downloaded.
6. Malware based-attacks
Malware-based assaults are one of the most significant online dangers to electronic financial systems. Such assaults result in the creation of harmful code. Attacks using malware are becoming more frequent in the financial sector these days. Several of the most well-known banking malware programs are Zeus, Spyeye, Carbep, KINS, and Tinba. Two traits are shared by almost all viruses: they secure backdoor access into the system and they steal user credentials.
7. Pharming
Online pharming is becoming increasingly common. By spoofing a bank’s URL, attackers can redirect users who try to access their accounts from a compromised device to a fake site designed to look like the real thing.
8. ATM Skimming and Point of Sale Crimes
Installing a skimming device atop the machine keypad to appear as a real keypad or a device made to be affixed to the card reader to appear as a part of the machine is a tactic for compromising ATM machines or POS systems. Malware that directly steals credit card data may also be installed on these devices. Skimmers that are successfully installed in ATM machines retrieve personal identification number (PIN) codes and card numbers, which are then copied to perform deceitful transactions.
9. DNS Cache Poisoning
In order to speed up the time it takes to resolve a query, businesses deploy DNS servers on their networks and store the results of queries there. Using a security hole, poisoning attacks are launched against DNS servers. This leads to the server checking the legitimacy of DNS answers from an unreliable source. The server will remember the incorrect data and serve it to anyone who makes the same request again. Bank customers might be redirected to a server under criminal control, where malware might be served or users might be tricked into entering their credentials on a fake website. An attacker can redirect users to a server under their control by manipulating the DNS entries for a bank’s website on a specific DNS server.
Conclusion
Modern life is heavily reliant on digital technology and online shopping is a significant component of this. The list is vast and includes everything from paying payments to making travel arrangements to buying online. Although we would think that all of our transactions are inherently secure, that is untrue.
In the end, the bank must not just provide security but also a simple, user-friendly experience and technology may make that possible fairly successfully. By implementing the appropriate tech solution, one can keep fraudsters away and the financial system can be saved from their vicious web.
[To share your insights with us, please write to sghosh@martechseries.com]
