Banking is a main industry that hackers and cybercriminals target. As banks improved their networks and became more connected globally, it became easier for criminals to break into their systems.
Financial institutions have lost millions of dollars around the world in theft and fraud. Banks realized the vulnerability of their systems early on and took measures to improve their cybersecurity. In today’s digital transaction economy, banks collect a lot of sensitive customer data. This requires banks to protect and encrypt their databases and inform customers what data is being collected to enhance security.
Cyber Security Risks for Banks
Banks have unique and much greater cybersecurity requirements than any other industry. Banking CSC needs can be divided into three categories.
- The first involves direct attacks on the bank’s systems and databases. Cyber hackers can steal account holders’ information from the bank and sell it on the dark web for profit. The stolen data can also be used to damage the institution’s reputation and blackmail the management. Denial of service and ransomware attacks can freeze bank operations while the client’s identity can be used for clearing fraudulent checks and steal funds.
- Second, cyber attackers can also target individual bank clients to steal money from their accounts. Banks have the added responsibility to ensure that their clients’ accounts are protected. Due to security lapse, if someone tempers the accounts, the bank can be held liable to pay for damages.
- The third area to be careful involves investments. Banks need to be careful about their investments and ensure that recipients of bank funds will be able to repay the loans. Banks have to check the cybersecurity measures that borrowers use to protect themselves against indirect risks and losses.
Comprehensive Customer Treatment Policy
People are increasingly relying on cashless and online digital transactions. E-Commerce is quite popular whether you are looking to buy groceries from the local retail store, pay for college tuition fee or buy a house on mortgage.
All these transactions rely on interconnected networks and banks are at the center of this digital economy. Hackers can gain access to these networks and databases just as easily as bank customers. The possibility of security breaches makes it critical for banks to make their operations resistant to hacking and cybersecurity controls for banks are mandatory in many places by law.
Under these circumstances, the sharing of an individual’s data is risky. Consumers in Europe are now allowed to opt-out from sharing their information online under GDPR. Even internal data sharing could lead to unfair outcomes if a client’s actions were legal in one country but not in the other. These are areas banks should consider when collecting and sharing data.
Steps Banks Can Take to Secure Databases
A banking institute should develop a comprehensive strategy to collect, store, access, analyze, and share data internally and with other stakeholders. Banks should also have a clear process that allows customers to understand and make a decision about what data they share with banks.
Banks should give customers a method to remove their data from the bank’s record if they want. This will prevent situations in which a customer may end up in a grey-list and never be able to get off it.
Furthermore, in order to mitigate security risks, banks need to implement CSC tools that continuously monitor traffic coming through their networks and prevent unauthorized personnel from accessing information in their database systems.
It is not just that data can be tempered and funds can be transferred by a hacker into their own account. In most security breaches, the hacker simply reads and copies records from the bank’s database to commit identity theft. There should be a monitoring system in place to prevent this from happening.
Data Security and Analysis for Banks
Banks are the custodians of financial transactions and their role is more important than ever for collection, sharing, and analysis of customer data.
In the past, a person could take cash out of the bank and spend it on any transaction they pleased. In today’s digital marketplace, is it impossible to process a transaction without the involvement of some kind of online banking institution?
The banking sector is built on trust. People who submit data and deposit money into a bank don’t necessarily check their accounts every day. This is because they have faith in the banker’s ability to keep their account secure and use their data responsibly.
Banks should do their utmost to ensure they will protect and main client data in their records in compliance with GDPR and other relevant regulations.