Banks and financial groups have a lot of risks and threats to manage. By design, these organizations are defined by how they provide protection and security to their clientele. And, as they seek to protect the assets entrusted to them, they become more likely targets, especially when stealing money can be as easy as guessing an email and password.
Cybersecurity in banking is everyone's concern, and every user (internal and external) can take steps to help protect the system. That said, much of the responsibility for banking cybersecurity rests on the information security teams at a given organization. This article is an overview of the assets they work tirelessly to protect, the cybersecurity threats at play, and the tools used to combat them.
Why Do Banks Need Cybersecurity?
When discussing cybersecurity for banking, it's important to remember that there's more at stake than cold hard cash. Liquid financial assets are conspicuous targets, as they always have been for financial institutions. But a digital equivalent of a bank robbery is not the only risk the industry faces. In fact, it may not even be the worst-case scenario.
Just as banks take steps to prevent unauthorized physical access to the wealth they house, computer systems must be protected, or theft is inevitable. When that happens, the fallout is often more than just missing funds—damaged public image, potential compliance concerns, and extensive infrastructure and operations (I&O) overhead to remediate the problem are all common outcomes.
Electronically stored account values aren't the only digital assets worth stealing, however. It may not even be the most valuable. Banks hold onto sensitive information, and these days, data sells at a high premium because of what can be done with it. Draining the account is bad enough, but the security threat of identity theft is even worse.
And bank account holder financial information is just the start. Emails, usernames, passwords, and more can lead to more successful data breaches in the future (against the same victim or elsewhere on the internet). Beyond that, the right system data can allow attackers to escalate their privileges in the system, potentially even giving them admin-level access, making the entire organization vulnerable to this type of cybersecurity threat.
This brings us to the system itself. A bank account of an individual victim can be a rewarding payout for criminals, and sensitive data can be sold to another threat actor at a premium, sometimes preying on the commercial banking organization or even the digital system itself represents the ultimate goal.
Ransomware attacks, passive monitoring programs, and botnet malware represent a possible security threat, either to the financial institution itself or future targets using the bank's infrastructure. Damage could be as isolated as a single service outage to a major data breach costing the banking industry millions in remediation, PR response, and collateral damage.
Cybersecurity Risk Factors in Banking
Information security teams at banks and other financial organizations need to contend with more than just the occasional hacker. However, system security is at risk from various types of threats, both internal and external, and some are more aggressive or elusive than others.
External Risk Factors
These are the threats we most commonly think of when we consider cybersecurity risk. Individuals and groups outside the organization are looking for ways to prey on the system's cybersecurity vulnerabilities.
- Opportunists—rank-and-file hackers that choose victims based on how easy it is to "smash and grab" what they want without detection
- Professionals—career hackers that, either on their own or as part of a group, aren't afraid to take on bigger fish for a bigger catch
- Saboteurs—Advanced Persistent Threats (APT) that are willing to spend years gaining access to data or systems, allowing them to steal data or disrupt operations with near total impunity
Internal Risk Factors
However, some of the biggest threats to the banking sector come from the inside. While not all are malicious, all are problematic, and none have straightforward solutions.
- "Whoops"—common mistakes made by staff that jeopardizes security, such as falling for social engineering, phishing attacks, using weak passwords, and so forth
- "Time is money"—vulnerabilities that result from a lack of maintenance, upkeep, or organizational investment—everything from postponing software updates to missing End of Life (EOL) migration deadlines.
- "They don't pay me enough"—bad internal actors; like a teller stealing from the till, sometimes staff willingly aid or participate in activities that exploit the system.
Institutional Risk Factors
Finally, some threats to financial services are largely a product of the complex interactions between governmental oversight, industry processes, and market conditions.
- Governance, Risk, and Compliance (GRC)—the financial services industry sees more regulation and government oversight than almost any other, both domestically and internationally, and violations can be incredibly costly
- Third-party vendors—larger banks and firms often outsource major IT maintenance and transformation projects to ease burdens on internal teams, and that can also mean outsourcing important aspects of risk management.
- Hardware and software manufacturers—in some cases, the core system assets themselves may present risks, such as software vulnerabilities, insufficient security features, and more.
Foundational Security Practices for Banking
While tactical implementation of information security will vary from industry to industry and even between organizations in the same industry, some basic best practices apply to every bank or financial institution if they want to maintain security, privacy, and compliance.
This section will only provide an overview, as each subject is too extensive to cover here fully. Tactics, best practices, software solutions, and other relevant details for each are numerous and complex enough to fill an article independently.
Identity and Access Management
Just like a vault has keys and locks, so does the digital system, and the first step toward protecting the system is strictly controlling those access points. In information security, this is called Identity and Access Management (IAM). Systems can reduce the risk of unauthorized access by requiring users of any permission level to authenticate and verify their identity.
The best IAM implementation relies on two core guidelines:
- Principle of Least Privilege (POLP)—Grant the minimum level of access the user needs and restrict all other privileges to higher access levels.
- Zero-Trust Security—Requires authorizations and validation from every user, whether internal or external to the system.
Endpoints include all user-facing devices connected to a system. Traditionally, this referred to organization assets (such as office computers). With the push toward cloud-based systems and Anywhere Operations, I&O teams have had to begin including off-site and personal devices under the term's umbrella.
Endpoint management seeks to limit vulnerable attack surfaces by implementing IAM and lifecycle management wherever possible and safeguarding against risks from user sessions on external devices.
Lifecycle management is the process of ensuring that hardware and software assets are kept as secure as possible through:
- Maintenance and updates
- Accurate inventory records
- Secure disposal of decommissioned assets to prevent unauthorized data recovery
- And more
Perpetual Prevention and Response
Beyond these basic policies and practices, effective cybersecurity requires ongoing efforts to detect vulnerabilities, monitor risks and system activity, and respond quickly to any potential cyber attack or data breach.
Counteracting Cybersecurity Threats in Banking
Cybersecurity and risk management don't happen by accident. Protecting the system, maintaining compliance, and ensuring ongoing operations all require a reliable risk management framework and strict adherence to appropriate policies. But it can be difficult for even experienced teams to know where to start making changes and improvements.
That's where RiskRecon, a Mastercard Company, comes in. We can help you audit your system's security and any third-party vendors you work with. Get a full picture of security risks and vulnerabilities, including risk priority, so that you can build a response plan more easily. Try it free for 30 days.