bankingciooutlook

Common Types of Security Threats in the Banking Industry

Banking CIO Outlook | Tuesday, August 24, 2021

The banking industry has become more vulnerable to cyberattacks as the adoption of digitalization has increased. The banking industry has become more vulnerable to cyberattacks as the adoption of digitalization has increased. 

FREMONT, CA : Customers find it much more convenient to maintain their accounts through online channels due to the rapid expansion of digital banking. Processes that used to take hours, days, or even weeks to accomplish, such as applying for a loan, opening a bank account, or investing in financial markets, can now be completed in seconds.

For example, mobile apps enable customers to complete various functions with only a few clicks on their smartphones, making the entire banking experience more pleasant and user-friendly. With these remarkable developments comes several new security risks that financial institutions must solve if they want to continue providing their consumers with the best, safest experiences possible.

The global coronavirus pandemic has only expedited the digital transition. Since the emergence of the virus at the end of the first quarter, the use of online- and mobile banking services has skyrocketed worldwide, with lockdown constraints restricting normal bank activity and social-distancing measures, further decreasing the possibilities for in-person engagement.

But this expansion means more significant potential for cybercriminals. According to studies, financial services organizations are targeted mainly by cybercriminals than any industry because the firms are highly vulnerable to the attacks as they store confidential client data. As most cyberattacks target banking customers instead of institutions, digital banking, a technology that aspires to give clients more control from the start, remains vulnerable to different types of security threats.

Threats for Cybersecurity in Digital Banking

Here are some of the common cybersecurity threats for digital banking. 

Unencrypted data

It is one of the most common threats faced by banks. Data is left unencrypted and is immediately used by hackers or cybercriminals, causing severe problems for the financial organization. All data kept on computers in financial institutions or on the web must be completely encrypted. It will ensure that fraudsters will be unable to utilize the data even if it is stolen.

Phishing

Phishing is the act of impersonating a trustworthy entity in electronic communication to get sensitive information like credit card numbers and other personal information for malevolent purposes. Phishing scams involving online banking have changed over time. They appear to be legitimate and real, yet they trick people into handing over their login credentials.

Spoofing

This is one of the latest types of cyber-threats that banks have to deal with. The hackers will mimic a banking website's URL with a website that looks and acts exactly like the original, and when the users enter their login credentials, the cybercriminals will capture those credentials and use them later. 

See Also: Top Bioinformatics Solution Companies

Weekly Brief

Read Also