Cybersecurity in Banking: Main Threats and Challenges in 2024

The banking industry, like any other, has now been progressively moving into the technological era. The days of physically going to your neighborhood bank to cash or deposit checks are long gone. Hence data security in banking industry is an essential topic today since almost any transaction can be completed online via the bank’s application or website.

According to the survey of the year 2023 conducted by the Financial Services Information Sharing and Analysis Center (FS-ISAC), 89% of financial institutions are increasing their cybersecurity budgets in 2024. It’s easy to claim that despite the availability of numerous security measures, the need for additional investments is obvious.

In this post, you’ll discover what cybersecurity in banking is. You’ll get an insight into the importance of following cybersecurity trends, discovering cybersecurity challenges, finding out cybersecurity trends, reviewing cases of cybersecurity attacks, and learning how to make a banking institution secure.

What is Cybersecurity in Banking Sector?

Cybersecurity in the banking sector refers to the measures and technologies employed by financial institutions to protect against unauthorized access, cyber threats, and data breaches.

The “cybersecurity” system, guidelines, and techniques are designed to protect against threats, potential harm, computer viruses, malware, hacking, information theft, and unauthorized access to networks, computers, applications, and documentation.

The main objective and importance of cybersecurity in banking are to protect the user’s assets. Additional activities or money transfers are moving online as more people abandon cash. Customers process transactions utilizing digital methods of payment, such as bank cards and online applications, which must be secure.

Pro note: Security compliance is obligatory for financial institutions, fintech firms having digital products that deal with customers’ sensitive personal or financial data, and other similar businesses. Failure to comply with, for example, PCI regulation can result in fines for being non-compliant, ranging from $500,000 per case.

The Importance of Being Aware of Cybersecurity Trends

Cybersecurity is not just important for IT organizations; it is essential for all companies. On a daily basis, banks process billions of money transfers. As a result, it is critical to implement bank data security and control measures to protect their data from cyberattacks. Here are some of the effects of security issues in the banking industry and how cybersecurity may help.

1. Customer detriment. When a customer suffers a loss due to credit card theft, it is usually possible to recover it from the bank. However, it takes time to recover the finances in cases such as data violations, which is very concerning for customers. Every bank must implement cybersecurity methods to protect their customers’ data to keep their data safe.
2. The bank’s reputation may be undermined. Data infringement is a critical issue for banks because it results in the loss of user data. Customers will lose trust in a bank if their personal information is compromised. Data breaches are typically the result of inadequate cybersecurity measures.
3. Quick advancement of fraud means. Banks must advance their customer-facing banking activities, as in today’s world, hackers can quickly gain access to financial applications if good cyber security measures are not implemented.

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Cybersecurity Challenges Banks Face

It can be difficult to implement prevention methods for cybersecurity banking. Among the major challenges that banks must overcome are:

1. Expertise shortfall: There is a notable gap in cybersecurity expertise within the banking industry, where the demand for properly qualified professionals greatly exceeds the available supply.
2. Inadequate training: Many bank employees are insufficiently educated on the importance of cybersecurity. Training is often outdated, failing to cover new threats and cyber attack tactics that target the financial sector.
3. Budget constraints: Banks often face limited budgets to dedicate to cybersecurity measures, complicating efforts to sufficiently protect against evolving threats.
4. Weak credentials: The use of weak passwords by bank employees simplifies the process for cybercriminals attempting to breach bank security systems.
5. Mobile vulnerabilities: Cybercriminals increasingly target mobile banking apps and devices, exploiting their vulnerabilities to conduct unauthorized transactions and data breaches.

The Top Cybersecurity Threats in 2024 for Banks

Listed below are the top cyber threats to financial sector that are expected to keep wreaking havoc on financial organizations and banks in 2024.

#1 Ransomware

Ransomware has become a complete nightmare for businesses worldwide for the last several years and shows no signs of abating anytime in the foreseeable future. This is a cybercrime technique in which documents are encrypted, and clients are locked out, with the fraudsters demanding money to re-enter the system.

Companies hit by ransomware cyber attack on banks may find their services paralyzed for prolonged periods, especially if they lack backups. Paying a ransom to these criminals does not ensure that your system access will be restored.

#2 Unencrypted Data

It is one of the most common of all banking security threats faced by financial institutions, in which data is left unencrypted and computer hackers use the data immediately, causing serious problems for the banks. All data stored on PCs in banking institutions or digitally should be entirely encrypted. It will ensure that, whether or not the data is stolen, hackers will be unable to use it.

#3 Common Cloud-Based Cyber Attacks

Since more statistics and crucial information are kept in the cloud, cybercriminals have taken advantage of this, and as a consequence, cloud-based threats are now one of the most prevalent threats of cybersecurity in banking industry. Banks should ensure that their cloud infrastructure is safely arranged to prevent harmful infringements.

#4 Social Engineering

Social engineering is one of the most serious threats to finance and banking. People are frequently the weakest component of the security chain, as they can be duped into disclosing sensitive information and credentials. This can affect both employees and customers of a bank.

Social engineering can take many forms, including phishing and whaling attacks and mailing false invoices that appear to have been sent from a reliable source. Keeping your employees updated on social engineering methods and how such attacks emerge is critical.

#5 Supply Chain Attacks

Cybercriminals are increasingly targeting software companies and delivering malicious files to users and other supply network members in the form of services or updates that seem credible on the surface. These banks cyber attacks compromise the supply chain, allowing cyberattackers to access the networks of the vendor’s clients.

Examples of Cybersecurity Attacks in Banks

Over the last few years, banks have had numerous data breaches. Here are a few examples of cyber attacks on banks:

• Ransomware attack on ICBC: In November 2023, ICBC USA was hit by a ransomware attack. Attackers encrypted files and demanded a ransom, threatening to release sensitive customer data if not paid​.
• DDoS attacks on US financial services: The US financial services faced numerous DDoS attacks in 2023. These attacks disrupted services by overwhelming systems with traffic, highlighting the sector’s vulnerability.
• Data breaches exploiting MOVEit vulnerabilities: In 2024, breaches via MOVEit vulnerabilities impacted millions. Incidents included a massive breach of Ontario’s birth registry and a significant data leak at IBM, affecting millions of healthcare records​.
• Royal mail ransomware attack: Royal Mail in the UK suffered a ransomware attack in January 2023 by LockBit, which disrupted international shipments and started with an Emotet malware infection.

As it is possible to observe, despite the advancement of security tech, there are still lots of successful fraud attack cases. So, keeping cybersecurity measures relevant is key.

How to Make Banking Institutions Cyber Secure?

After all, banking institutions can also take steps to secure their systems from common threats of data security in financial services. This includes the following:

1. Overcoming the labor shortage by collaborating with other companies and security associates who provide managed services
2. Incorporating ongoing training in banking cybersecurity awareness or evaluating current initiatives to make sure they are current and relevant in the threat environment
3. Investing in detection and protection tools that will allow you to be alert and avoid being hacked
4. Implementing customer education programs to make sure that clients do not reveal sensitive information to cybercriminals

Wrapping Up

Don’t give cybercriminals the upper hand. DashDevs can assist you in preventing security threats! Our effective approaches could be exactly what your company needs to stay on top of cybersecurity. Please contact us here if you want to learn more or get started!

DashDevs, a fintech firm, has been on the market for more than 13 years, delivering development services of all types. We assist companies in resolving both internal and external security risks and preventing the privacy of sensitive client information from being compromised.

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