The daily activities of banking systems are closely connected with the use of modern computer technologies and are entirely dependent on the reliable and uninterrupted operation of electronic computer systems. World experience shows the unconditional vulnerability of any company since cyber crimes do not have state borders, and therefore hackers have the ability to threaten information systems anywhere in the world equally.
The concept of “cyber-crime” are increasingly found on the pages of the world media and almost daily attract the attention of the public. Today it is no longer just words, but a real threat.
Cyber Security Threats to Financial Sectors
To present the real scale and momentum of this business, it is enough to give real-life examples. In 2009, hackers, taking possession of bank card numbers of more than a million US citizens, earned about $9 million in no more than half an hour. In 2019, the technologies available to hackers are much more progressive and numerous and can bring much more damage.
The attack on banks for hackers is the most profitable business and at the same time a pleasant source of income. In recent years, attacks on banks have become increasingly organized. At the same time, the number of persons involved in hacker attacks also increases annually. Often, hackers are united in groups to develop new technologies and methods of hacking, as well as to carry out centralized attacks.
According to experts, in 2019 the number of cyber attacks on financial institutions will increase by almost a third compared with last year. This is due, on the one hand, to the increasingly rapid development of technology, and on the other hand, the fact that banks and financial institutions still underestimate the risks and extent of the problem.
Uniform cyber security standards introduced in the US and the EU, although not being a panacea for eliminating all types of cyber threats, in most cases demonstrate their effectiveness. Being obliged to bring internal security standards in compliance with the requirements, the US and European banks have a relatively effective system of counteracting most threats. At the same time, local banks in the countries beyond that zone, forced to provide risk management tasks themselves, remain virtually unprotected.
Building local security systems is, firstly, extremely costly, and secondly, practically ineffective. Banks, with a significant amount of capital, at the same time do not have significant free funds to maintain the proper level of cyber security and prefer to distribute them to other expenses. In reality, first of all, the reputation of the bank depends on the effectiveness of protection against external threats, and income is already directly dependent.
At the same time, as practice shows, any, even the most advanced cyber security infrastructure, turns out to be completely ineffective if bank employees fail to observe the fundamental rules of cyber security. Hackers often rely on the human factor, hoping that an employee will follow a “harmful” link, unpack an incomprehensible Zip file, or work remotely from an infected device. As practice shows, the elimination of this problem is perhaps the most challenging task of the management and security department of the company.
Fraud in Banking Sector
Bank fraud can be divided into two types:
- Internal – cases of abuse of authority and access to information by bank employees fall under it;
- External – cases of the influence of external intruders on the resources of the bank or customers.
In cases of the first type, everything depends on the quality of the processes and the internal control of information security. For each organization, they are unique.
And the number of incidents of the second type is influenced by the tendency to provide external access to banking products. Banks compete in new products to make it more convenient (and yet and more) for a client to manage money. These are internet, mobile and telephone banking systems, account management through chats and instant messengers. However, most of those new systems are offered to clients before being tested well-enough and completely secured.
Protection of external payment services and the entire banking system requires a systematic approach. Among the effective mechanisms are briefly described below:
Effective Mechanisms for External Payment Protection
Here are some effective mechanisms for safeguarding the external payment services:
#1 Security of service development and administration, including periodic security checks (Secure SDLC, Vulnerability Assessment, Pentest, Security Audit);
#2 Protection of access and performance of critical operations (Multi Factor Authentication, One Time Password, Transaction Authorization; Code for Challenge-Response Authorization);
#3 Monitoring actions and operations (User and Entity Behavior Analytics, Anti Fraud Monitoring);
#4 User Awareness Training
Cyber security should be the biggest priority ranging from financial organizations to professional essay writing services and other companies. The cyber security development should be partly supported at the governmental level, because the security of banks ensures the stability of the country. Surprisingly, the most challenging threat factor to overcome is a “human factor” which hackers use for their benefit.