cybersecurity-in-banking

[cybersecurity-in-banking]

Cybersecurity In Banking In The UK: A Comprehensive Guide

The banking industry, owing to its unfettered access to financial wealth and personally identifiable information (PII) of customers, has always been an attractive target for cyber-attacks. The banking industry has seen a massive upsurge in digital transactions and there has been a corresponding and alarming rise in cybercriminals attacking the banking systems for vulnerabilities as well as duping consumers to reveal their credentials.

The banking industry, owing to its unfettered access to financial wealth and personally identifiable information (PII) of customers, has always been an attractive target for cyber-attacks. Since covid, the banking industry has seen a massive upsurge in digital transactions and there has been a corrAccording to the Verizon Data Breach Investigation Report (DBIR), in 2022, 23,896 security incidents ensued, of which 2,527 incidents and 690 confirmed data disclosures belonged to the financial and insurance industry alone. As the financial industry is becoming more digital and partnership-driven with the launch of new regulatory mandates such as open banking, and the adoption of new business models such as banking-as-a-service and embedded finance, the tables have turned from internal factors being the cause of data breaches to external ones, with 73% of the violations arising from external actors.

Shared banking systems, web apps, widespread use of machine learning algorithms, and API integrations with third-party providers have only added more vulnerabilities for data breach incidents and cyber-attacks. Not only would this put such highly critical information in the wrong hands, but it would also equally cause reputational damage to the bank itself, where it may even need to face regulatory penalties or legal costs. In September 2022, KeyBank publicly announced that an untold number of its mortgage customers had their information stolen. It was later slapped with a lawsuit, claiming that both the bank and a third-party service provider were negligent in monitoring and controlling potential IT security issues.

With incidents related to cybersecurity in banking becoming more instantaneous and sophisticated, we look into why cybersecurity has become a crucial agenda for financial institutions.

Cybersecurity in Banking: The Imperatives for Financial Institutions

Cyber incidents have a multi-faceted impact on a bank’s business. Just one cyber incident may result in a significant amount of financial loss and reputational loss, while also inviting regulatory enforcement actions and lawsuits. Even if cards are cancelled, and fraud is immediately taken care of, banks’ data can still be used to target market strategies or reveal information that can be used against the bank.

The bank itself may have to reimburse the ransom amount in some instances. On 28 May 2018, BMO and CIBC announced that hackers had breached their computer systems and stolen sensitive client information. Fraudulent transactions occurred following this data breach, and both BMO and CIBC reimbursed their clients for over $6.85M and $1.78M, respectively, of money stolen through these transactions.

Strict regulatory requirements only add further to the looming challenges for banks when it comes to cybersecurity practices, with many organisations at risk of inviting enforcement actions if they fail to adapt to the ever-changing laws.

How NayaOne may help you build a robust cyber resilience

NayaOne is a one-stop destination that helps improve cybersecurity in banking and promote cyber resilience by discovering and evaluating modern technology providers for their cybersecurity needs. Through one direct connection, banks have access to pre-vetted datasets and in-built governance rails that support the identification and review of cyber defences while ensuring compliance with cybersecurity guidelines.

Explore cybersecurity in banking, fintech marketplace and understand the challenges faced and measures taken by the leading financial institutions to build cyber resilience.