Cybersecurity

An RBI report revealed that India’s financial sector faced over 13 lakh cyberattacks between January and October 2023. This is a clear indication of how susceptible banks and other financial institutions are to cyber risks. With the growing use of online banking, the number of reported fraud cases is significant. This highlights the need for stronger security measures and greater awareness of cybersecurity to protect data and maintain the trust of digital banking users. 

What is cybersecurity? 

Cybersecurity refers to the methods and technologies that banks use to protect customer data, financial transactions and systems from cyber-attacks. It helps safeguard sensitive information from being stolen or misused. 

Key elements of cybersecurity in banking 

• Data protection: Banks use encryption, firewalls and other security tools to protect customer data from being accessed or stolen by unauthorised users. 
• Two-factor authentication (2FA): To add an extra layer of security, banks require users to verify their identity using two methods (like a password and a code sent to a phone) before accessing accounts. 
• Regular monitoring: Banks constantly monitor for unusual activity or breaches in their systems to detect and prevent attacks. 
• Awareness: Banks also educate customers on recognising phishing scams and other forms of fraud, helping them avoid disclosing sensitive information to cybercriminals. 

Top cybersecurity threats that are common in the finance industry 

Here are the common types of cybersecurity threats:  

Phishing and social engineering 

Scammers trick users into revealing personal information like passwords or bank details. They pretend to be trustworthy organisations through fake emails, messages or calls. 

Ransomware attacks 

Hackers infect a bank's computer systems with malicious software to block access to data. Then, they demand a ransom payment to unlock it. This can disrupt services like ATMs and online banking. 

Distributed Denial of Service (DDoS) attacks  

Attackers overload a bank's online services with excessive traffic, causing websites or apps to crash. This prevents customers from accessing their accounts. 

Supply chain attacks  

Hackers target third-party vendors or service providers connected to a bank. By compromising these partners, they can gain access to the bank's systems. 

Data breaches 

Cybercriminals break into a bank's systems to steal sensitive customer information. It leads to identity theft or financial fraud. 

Insider threats 

Employees or insiders with access to banking systems may intentionally or unintentionally compromise data security. 

Reasons why cybersecurity measures are important 

Protect personal information 

Banks maintain sensitive client information such as account numbers and personal identity. They can keep your money and personal information safe from criminals by implementing effective cybersecurity measures. 

Maintain trust 

People trust banks with their finances. If a bank is hacked or suffers a data breach, it can lose that trust quickly. Good cybersecurity ensures that customers feel secure using their services, knowing their data and money are protected. 

Prevent theft and fraud  

Cyberattacks, like phishing scams and ransomware, can lead to significant financial losses for both the bank and its customers. Cybersecurity helps detect and stop these threats before they cause harm, saving money and protecting accounts. 

Ensure smooth operations  

Cyberattacks can disrupt banking services, shutting down ATMs, online banking or mobile apps. And cybersecurity keeps the systems running smoothly. Thus, ensuring customers can access their money whenever they need it. 

Comply with regulations 

The government has strict rules that banks are obligated to follow in order to protect data and prevent cyberattacks. So, having cybersecurity measures helps institutions also comply with these regulations and avoid penalties. 

What should you do as a user? 

1. Use strong passwords to log into your online banking accounts. 
2. Enable two-factor authentication for extra security. 
3. Never share your PIN or passwords with anyone, not even bank employees. 
4. Regularly check your account statements for any unauthorised transactions. 
5. Avoid using public Wi-Fi for online banking or financial transactions. 
6. Update your banking app and phone software to protect against the latest security threats. 
7. Be cautious of phishing emails or calls asking for personal or banking details. 
8. Log out of your banking app or website after completing transactions. 
9. Set transaction alerts to get notifications about any activity in your account. 
10. Report suspicious activity immediately to your bank. 

Endnote 

Other than that, you should update your mobile banking apps to help prevent new types of risks. Moreover, do not install any unauthorised or unfamiliar applications on the phone since they contain viruses that can easily hack personal details. Similarly, when you are engaging in banking services, connect with trusted and secure networks and, if possible, connect via VPN.