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The Threat is Real: Battling Cybercrime in Banking

The year 2016 - popularly declared as the year of innovation - offers a safe cloud to the banking sector with launch of better practices, the advent of Artificial Intelligence and biometrics and creation of heavily armed, aggressive cyber firewalls… but does that make it “hacker” proof?

Recently a Russian cybersecurity firm shook the world when it confirmed that over 100 banks worldwide were hit in a cyberheist with losses up to $1billion in stolen funds. Late last month, Bangladesh’s Central Bank woke up to a modern day cyber heist with $101 million siphoned off – only $20 million of this have since been recovered. These repeated and highly sophisticated organized crimes have cost businesses over $ 400 billion a year and it’s no surprise that their primary target has always remained the banking sector. The threat is real!

The Wired in its list of the biggest threats to hit the banking sector this year has included digital extortion hacks and attacks that change and manipulate data. There have been instances of people across the world not being able to access their accounts to losing hefty sums of money to hackers attacking even ATMs. According to the Federal Financial Institutions Council, cybercriminals stole more than $40 million from just 12 debit card accounts via an ATM hack in 2015. In the past both HSBC and NatWest sites were dysfunctional after being targeted by hackers.

So, what firepower are the banks relying on to counter the relentless cybercriminals? Rigorous security measures and pro-active defences are being adopted to thwart cyberattacks. Besides investing in better data management programs, banks are also sharing information about their own cyber threats with other firms, IT analysts and government agencies in real time – to develop better solutions. One such group created by banks is the Financial Services Information Sharing and Analysis Center with over 5,500 members.

Shedding light on the adverse effects of cybercrime, Austin Berglas, the former deputy chief of the New York’s FBI cyber security said, “It’s not enough to build up walls and harden the systems, you need human capital to understand the threat.” Several banks today are hiring the best cyber security agencies that help in developing robust risk management regulations and provide reliable and useful threat information.

But why should the financial service firms be more cautious? According to Websense, the finance sector is hit by security incidents 300 times more frequently than businesses in other industries. There is also a need to build a more cohesive community of regulators, banks, technology providers and enforcement agencies to counter these threats on a global scale.

Several leading banking companies have tied up with universities and research organizations to understand and combat cyber security threats. This long-term investment plan not only benefits the bank but also builds trust with the customers. The Royal Bank of Scotland has promised to invest hundreds of millions of pounds in its computer systems after a series of glitches and J.P. Morgan has recently increased its cybersecurity budget from $250 million to $500 million.

Besides better risk management plans and investing in technology to abet cyber thefts, the banking sector should continue to educate and enhance customer awareness - being equipped with information maybe one of the best hacks against a plotting criminal. 

 

Comments: (1)

Balasubramaniam Gd
Balasubramaniam Gd - DBS - singapore 06 June, 2016, 09:14Be the first to give this comment the thumbs up 0 likes

Despite all the warnings, scenario plannings and risk assessment overkills in banks , they still get hacked, shows the hackers are faster  on the assessments and on the intelligence with all the banks combined. Where wil this end............