Why Cyber Security in Banking & Finance is Vital
Why Cyber Security in Banking is vital: As a financial institution, a bank accepts deposits from the public while simultaneously providing other financial services. In short, they protect money by depositing it in personal accounts, and you can complete a transaction anytime you want. They also give out loans that are supposed to be returned with interest.
The primary function of a bank is to facilitate a country’s economy. However, banking has witnessed significant damage through physical theft and cyber fraud. Banks are always prone to cyber fraud as criminals can hack into their servers to obtain a customer’s personally identifiable information.
As most banking by individuals and companies, today is done online, the risk of a data breach has also increased. In this article, we’ll look at what cyber threats modern banks face, what cyber security is, and why cyber security in banking is vital.
What is a Cybersecurity Threat?
A malevolent act that attempts to damage, steal, or disrupt one’s digital life by accessing one’s private data is a cyber security threat. These dangers might manifest as computer viruses, data security breaches, or even Denial of service attacks.
Everyone is susceptible to the kind of damage that cyber security threats can cause, and in certain instances, these threats can completely corrupt a computer. Every day, financial institutions confront the same kinds of cyber security risks.
As a result, a cyber security plan that is both thorough and efficient has been implemented to protect both data and money. Let’s look at all the potential dangers and hazards that banks encounter regarding cyber security so that you can comprehend why it is necessary.
Cyber Security Threats faced by Banks
There are so many threats a bank faces daily. With the advancement of technology, cyber security strategists have planned many things to protect their banks. Some common cyber security threats banks regularly encounter include:
- Mobile Apps: Banks have launched their mobile apps as cellular technology has improved. These apps might have saved your time and effort, but they have also created a threat to banking. The bank faces a cyber security threat whenever a customer uses the app.
Data thefts can occur via any malicious software already on the device or the lack of tight security maintained while using the app. Cyber security engineers must ensure a flawless user experience without the fear of data leakage.
- Digital Payments: Since the dawn of the internet, everything has become increasingly digitalized and made much easier for humanity. One of them is online shopping or e-commerce, which has perpetuated the use of digital payment apps. But this technology has not helped banks at all.
Cybercriminals have resorted to pretending to represent these organizations to extract useful information such as passwords. This act is known as spoofing. If cyber security is not strengthened, these threats can cause a significant problem for banks, users, and their details.
- Customer Data: A bank’s cyber security team’s most important job is protecting its customers’ details. Banks hold their clients’ personal information, including addresses, names, and credit card details, which can cause trouble and damage both customers and the bank.
The criminals not only steal data but sometimes also manipulate it as well. Cyber security officers are in high demand to solve this problem and prevent hackers from stealing and manipulating data and saving the bank and their customers.
- Data that is not encrypted: This is a very simple but essential part of good cyber security. All of the information stored on computers in your bank and online should be encrypted. Even if hackers steal your information, they can’t use it immediately if it’s encrypted.
If it’s not encrypted, hackers can use the information immediately, which can cause severe problems for your financial institution.
- Malware: Malware-infected computers and cell phones used by end users pose a risk to the cyber security of your bank every time they connect to your network. Sensitive data goes through this connection, and if the end user’s device has malware, that malware could attack your bank’s networks if there isn’t enough security.
- Unsecure Third-party Services: To better serve their customers, many banks and financial institutions use third-party services from other providers. But if these third-party vendors don’t have good cyber security in place, your bank could get hacked. Before using a third party’s security solution, you should look into how to protect yourself from the security risks they pose.
- Manipulated Data: Sometimes hackers don’t steal data; they go in to change it. Unfortunately, it can be hard to spot this kind of attack immediately, and financial institutions can lose millions or more because of it. If your bank has been attacked this way, it can be hard to tell what has and hasn’t been changed since the data doesn’t always look different.
Why is Cyber Security Important?
After seeing all the risks the bank is prone to every day, you can understand the importance of cyber security. A good cyber security plan and management is necessary for all banks to protect their customers and data.
A cyber security threat can not only steal the user’s data or personal information but also harm the bank and result in huge damage. This is why cyber security is extremely vital for all banking institutions. Following are the reasons why cyber security is important for banks.
· To safeguard the bank’s reputation and customer’s information is very important. Having a strong team of information security analysts, cyber security analysts, and other cyber security professionals is extremely necessary. Banks should also advise their customers on ways to protect their data from cyber theft.
- If a bank faces a cyber threat, the damage will not be restricted to the bank. It will extend to the customers, their valuables, and their data. They will also have to undergo tiresome legal procedures to prevent harm.
- The valuable data of customers has been used for many crimes. That’s why people are scared for their data and money, becoming a victim of such cybercrimes. Hence, cyber security is essential in banking to prevent any data loss or cyber security threats that can harm the customer in the future.
- Hackers stealing information and money from digital apps are a severe cyber threat. Cyber security has created such jobs and management plans to prevent hackers from entering their systems and hacking customers’ data. Banks have updated their banking technology and secured themselves and their customers from such threats.
- Banks have created their own rules and must abide by the laws and regulations provided by the government. If the bank fails to protect its customer’s data and money, the government can fine the bank or even shut it down.
This is why good cyber security management is vital in banking to ensure the safety and protection of the customer’s data, personal information, money, and the bank’s data and profile.
Without proper cyber security management, a bank can be prone to various threats, crimes, and damage, and only cyber security can control it.