In the present era, data is the new oil. The same holds true for digital banking entities and platforms operated by them. Data is essential to all industries, including banking. It helps organizations form better customer-facing policies using customer experience (CX) tools, and study channel performance. Here, channels mean ways to perform banking. These include 1. Branch 2. Mobile 3. ATM 4. Telephone 5. PC and 6. Internet.
Data also allows digital banking platform providers to analyze the market and insights into customer behavior, which is also useful to comply with regulations like KYC and AML. However, as the sector continues to grow exponentially, spurred on by the rise in virtualization, the risk to this data is also increasing, as the sector is attracting cybercriminals’ attention. A 2019 Accenture report put the average cost of cybercrime borne by an organization at $13 million, with banking and utilities being favorite targets. However, the attacks are mostly customer-facing and not targeting organizations.
The attacks are damaging to both customers and Financial Institutes (FIs) themselves. While attacks like phishing harm ordinary customers, attacks like spear phishing and data breaches can potentially harm organizations financially and cause trust loss. There are various factors responsible for such incidents. The first and foremost factor is lack of awareness. Despite sustained efforts by FIs and law enforcement authorities, people continue to fall for fake lottery schemes or fake emails from the FIs. Unsecured IoT devices continue to be a headache for organizations and individuals alike.
The second factor is access management. All organizations give their c-suite more control or privilege over the organization-related data they can access. However, criminals have managed to access and manipulated this privilege, resulting in some significant data breaches. Organizations now have the option to deploy Privileged Access Management (PAM) software to curb such misuse.
Social media is also playing a crucial role in aggravating security headaches. Many customers make critically important data public via social media. This allows cybercriminals to access and manipulate unsuspecting customers’ accounts.
Malware and ransomware are the new headaches added to the list. Apart from a few critical servers, transactional operations are performed by end-to-end user devices that are exposed to external threats.
Similarly, unencrypted critical data remains a problem area for many firms. There have been examples where such data has been accessed by cybercriminals. The data accessed can be then utilized for various crimes and even sold on the darknet to be utilized for crimes like identity theft, etc.
Another problematic area is ironically the area most needed by a platform to ensure wider access to its consumers: mobile apps. Each user may not have the same level of knowledge about cyber hygiene. This provides a much wider attack area for criminals to exploit.
Of course, these are just some of the security problems being faced by digital banking platforms. However, as the technology gets more sophisticated, so does the nature of the cyberattacks, as displayed by incidents like the SolarWinds megabreach. This will bring an increased focus on data security on these platforms and prompt them to spend more on proactive security.