Cybersecurity in Banking: Threats and Security Solutions
Cybersecurity is a growing concern for all organizations, but especially for banks, which handle sensitive financial information and manage financial transactions. Banks are entrusted with protecting customer funds and ensuring the integrity of financial transactions.
What Are the Unique Cybersecurity Needs of Banks?
Financial organizations are a prime target for malicious actors. The growing adoption of web and mobile applications and digital payment methods provide a larger attack surface. In addition, the interconnectedness of the banking system means that a breach in one institution can have an impact on other organizations.
To ensure customer trust, comply with regulations, and address mounting cybersecurity risks, banks must take exceptional measures to safeguard their digital systems and protect customer data.
This is part of a series of articles about application security.
In this article:
Top Cybersecurity Threats Faced by Banks
Financial Account Takeover
Account takeover occurs when an attacker gains unauthorized access to a customer’s account, allowing them to perform fraudulent transactions or steal sensitive information. This can have severe consequences for a bank’s customers. In some cases, attackers manage to compromise an account belonging to a banking official. Either type of attack can be devastating for a bank, resulting in financial loss, reputational damage, and legal repercussions.
About a third of ATO attacks originate from bank accounts. In Q1 of 2022, the number of fraud attacks grew by over 230% while the number of online transactions only grew by 65%.
To mitigate this threat, banks must implement robust authentication mechanisms, such as multi-factor authentication and biometric verification, to ensure that only authorized individuals can access customer accounts.
Infostealers
Infostealers are a type of malware designed to steal sensitive information, such as login credentials and credit card details. This poses a significant threat to banks, as the stolen information can be used for various fraudulent activities, including identity theft and financial fraud. More advanced threats such as banking trojans use infostealers as a primary component.
There is a huge black market for stolen logs. In 2023, the market for infostealer logs continued to grow, with the Russian market alone growing from two million in mid-2022 to five million in early 2023.
Banks must implement robust anti-malware solutions, conduct regular security audits, and educate their employees and customers about the importance of securing personal endpoint devices used to access financial systems.
Phishing
Phishing is a tactic where attackers send fraudulent emails or messages posing as a legitimate entity, such as a bank, to trick recipients into revealing sensitive information. Phishing is often used to obtain login credentials, which can then be used to gain unauthorized access to financial accounts.
Phishing is also on the rise. In 2021, phishing attacks affecting the financial sector grew by over 20% compared to 2020.
To counter phishing, banks must employ email security software that identifies and blocks phishing attempts. Banks should also educate their employees and customers about the signs of phishing emails and the best practices for avoiding them.
Ransomware
Ransomware is a type of malicious software that encrypts files on a computer system, making them inaccessible until a ransom is paid to the attacker. Banks are attractive targets for ransomware attacks due to the sensitive data they hold and the financial value of that data.
Ransomware attacks in the banking industry have been growing rapidly. For example, in 2021, the number of attacks grew by over 150%, and this was after the increase of over 500% during 2020.
To mitigate ransomware risks, banks should implement regular data backups and implement anti-ransomware solutions, which can detect malicious software that exhibits ransomware-like characteristics. The use of endpoint detection and response (EDR) tools can also help in identifying and neutralizing ransomware attacks before they can cause extensive damage.
Attacks on Banking Applications
Banks increasingly rely on web and mobile applications for providing services to customers. These applications are subject to various types of attacks such as SQL injection (SQLi), Cross-Site Scripting (XSS), Local File Inclusion (LFI), and Java Object-Graph Navigation Language (OGNL) injection. These attacks can lead to unauthorized data access, theft from customer accounts, or even compromise of back-end systems.
Banking apps are an obvious target for cybercriminals. For example, attacks on banking applications increased by almost 40% between 2020 and 2021.
To protect against these, banks need to adopt secure coding practices and use tools that scan for vulnerabilities in the software. Web Application Firewalls (WAFs) can also be effective in blocking known attack vectors.
Distributed Denial of Service (DDoS) Attacks
Another significant cybersecurity threat faced by banks is Distributed Denial of Service (DDoS) attacks. In a DDoS attack, a large number of compromised computers, known as a botnet, flood a target system with an overwhelming amount of traffic, rendering it inaccessible to legitimate users. For banks, this can lead to disruption of services, loss of revenue, and erosion of customer trust.
The banking industry faces a growing number of DDoS attacks. In 2021, there were 7,000 attacks on banks and payment card services in the first half, and this number has been growing since. NetScout estimated that approximately half of all DDoS attacks targeted the financial sector.
To defend against DDoS attacks, banks must deploy firewalls and intrusion detection and prevention systems, and leverage the scalability of cloud-based DDoS mitigation services to absorb the impact of large-scale attacks and allow legitimate traffic to access banking systems.
Key Components of Bank Cyber Security
Here are the main areas banks need to secure to ensure they protect their internal systems and customers against cyber attacks.
Network Security
Banks must establish secure networks that can withstand sophisticated attacks and prevent unauthorized access. This includes implementing firewalls, intrusion detection systems, network segmentation to prevent lateral movement, and encryption protocols to protect data in transit. Regular vulnerability assessments and penetration testing should also be conducted to identify and remediate any weaknesses in the network infrastructure.
Data Protection
Data protection is paramount for banks, as they handle vast amounts of sensitive customer information. Banks must implement robust data encryption techniques to ensure that customer data is securely stored and transmitted. Access controls should be in place to restrict access to authorized personnel only. Regular data backups and disaster recovery plans should also be established to mitigate the impact of data breaches or system failures.
Identity and Access Management (IAM)
Identity and Access Management (IAM) implements processes that control who has access to what information in the banking system. IAM ensures that only authorized individuals can access sensitive data, reducing the risk of a data breach.
IAM also helps in monitoring user activities, identifying and responding to irregularities, and enforcing security policies. It ensures that each individual within the banking system has a unique digital identity that can be monitored and controlled.
Endpoint Security
Endpoint security is another critical component of bank cybersecurity. It focuses on securing the endpoints or entry points of end-user devices like workstations, mobile devices, and servers, which can be exploited by cybercriminals to gain unauthorized access to the bank’s network.
Endpoint security involves implementing multiple security layers, including legacy antivirus, next generation antivirus (NGAV), and endpoint detection and response (EDR), to help security teams continually monitor endpoint activities, automatically block threats, and investigate and respond when major security incidents occur.
Application Security
Banks use numerous applications in their operations. Some are mission critical back-end systems, while others are customer-facing web and mobile applications. Each of these can be a potential entry point for cybercriminals. Application security involves implementing measures to secure these applications, reducing the risk of a cyber-attack.
Application security involves protecting the applications from threats throughout their lifecycle, from design to deployment. It includes measures such as secure coding practices, regular security testing, and the use of application security tools to identify and rectify potential vulnerabilities.
Cybersecurity Solutions for the Banking Industry
Here are some of the main security solutions banks use to defend against cyber threats and protect their customers’ data and funds.
Cloud Native Application Protection Platform (CNAPP)
For banks that make use of cloud native technology like containers and serverless functions, a Cloud Native Application Protection Platform (CNAPP) can secure applications, data, and networks in cloud environments. CNAPPs consolidate multiple security solutions, cloud infrastructure entitlement management (CIEM), cloud security posture management (CSPM), and runtime workload protection (CWPP).
Read our whitepaper about protecting financial institutions against cloud native security threats
Security Information and Event Management (SIEM)
Security information and event management (SIEM) collects and analyzes security data from various sources, providing a comprehensive view of a bank’s security posture.
SIEM enables banks to detect security incidents promptly, conduct forensic analysis, and ensure compliance with regulatory standards. It also helps in managing and correlating logs, identifying patterns, and predicting potential threats.
Firewalls and Intrusion Detection Systems (IDS)
Firewalls and intrusion detection systems (IDS) are essential tools for enhancing bank cybersecurity. Firewalls control incoming and outgoing network traffic based on predetermined security rules, preventing unauthorized access to the network. IDS monitors network traffic for suspicious activities and alerts system administrators of potential threats.
Data Loss Prevention Tools
Data Loss Prevention (DLP) tools are crucial for securing sensitive customer data. DLP tools monitor, detect, and prevent data breaches, ensuring the confidentiality and integrity of customer data. These tools create a protective shield around the data, preventing it from leaving the bank’s network. They also help in complying with data protection regulations.
Anti-Malware Solutions
Anti-malware solutions, both legacy antivirus and next-generation antivirus (NGAV), are vital for safeguarding the bank’s systems and network against malware and viruses. Legacy antivirus protects against known threat signatures, while NGAV uses behavioral analysis to identify new and unknown malicious software, even if it doesn’t match a known attack pattern.
