Cybersecurity is next to the internet in the order of necessity in life. It's a crucial component of this digital world where industries thrive with the power of disruptive technologies. For this reason, cybersecurity is a big concern, especially for industries pertaining to financial services.

Financial services are more vulnerable to cyberattacks than businesses of other industries. A small breach in the security results in loss of data and earnings of a banking institution, disruptions in operations, loss of reputation with loss of customers.

The Reserve Bank of India (RBI) also stated that in the post-COVID-19 lockdown period, the number of cyberattacks has increased along with cyberthreats. Let's take a closer look at cyber threats in the banking sector.

We Need To Talk About Identity Theft

Banking frauds in India have grown in numbers since the coronavirus pandemic. According to RBI's 2019-2020 annual report, the amount involved in banking frauds increased 2.5 times to INR 1.85 lakh crore in 2019-2020 as compared to INR 71,500 crore in 2018-2019. Identity theft refers to using a person's personal data without their notice and approval with the intention of committing fraud. A privacy breach in banks can lead to the information of a customer being sold or purchased on the dark web.

Third-Party Services Are Not Reliable

Several banks and financial institutions employ third-party services from external merchants in hopes that they will provide better service to their customers. Nevertheless, if those merchants don't have exceptional cybersecurity set up, the bank could be the one to face the hit. It is essential to understand how to shield financial institutions from unforeseen security threats due to the integration of third-party services in the infrastructure.

Spoofing Is A New Issue

Spoofing is somewhat a new type of cybersecurity threat where the hackers try a way to imitate a financial establishment's website's URL with a replica that looks and functions in the same way. When a customer enters their log-in data in the replica website, that data is noted by the cybercriminals to be used later. The most alarming fact out of all this is that the hackers don't use a slightly different URL but a similar URL. This is how they target those who visited the original website.

Ransomware

Ransomeware scrambles information making it close to impossible for the proprietors of that information to get to it, without paying a big price. Ransomware has cost financial firms more than $75 million every year in harm, yet it still remains one of the most widely used types of cyberattacks.

What's The Solution?

It's foolish to believe that cyberattacks will stop out of the goodness of heart. The only way to stop cyberattacks is to have a strong security backing. Here are two ways the banking and financial institutions can shield themselves.

A Strong Security Solution: Monitoring every transaction manually for possible security threats can be a tedious process and impractical in the long run. Banks need to work to automate all scanning and monitoring functions with a website firewall that can filter and block compromised traffic at the entry door.

An effective firewall is one that identifies and stops all the attacks. It should also notice patterns of attacks targeted towards the website. The firewall should be easy to set up and customize, and the reporting and analysis are easy to understand for even an average business professional.

Audit The Application: Every time a cyberattack is traced to its origin point, it shows some open vulnerability within the system. To make sure the application is free of loopholes and vulnerabilities, one must focus on internal threats just as much as they focus on external threats.

Development bugs, missing security links, outdated systems are some of the most common security vulnerabilities in the organization. To keep the system in check, a thorough security audit should be done once in a while to identify missing pieces. Such assessments detect lagging systems pertaining to security.

While there are several more steps to secure banking and financial institutions, the mentioned steps are unskippable. In order to protect them against cyber-attacks, banks should conduct robust security solutions to ensure all the data and applications remain untouched by unauthorized personal and are confidential.