The role of cybersecurity in the BFSI industry

As technology continues to advance, the frequency of online financial transactions is expected to increase, improving convenience for both customers and financial institutions. Additionally, data breaches and cyberattacks result in significant financial losses to institutions every year. As a result, there is growing interest among executives to strengthen the cybersecurity of the BFSI industry. Based on S&P Global's findings on the distribution of cyber incidents reported across various industries in recent years, financial institutions have emerged as the most affected sector, accounting for more than a quarter of such security incidents. Masu.

As the digital environment evolves, so do the threats posed by cyber attackers. Below are some of the statistics that highlight the impact of cyber threats.

• Over the next five years, the cost of cyber threats is projected to be: 15% increasereached 10.5 trillion by 2025, According to Cyber ​​Crime Magazine.

• The annual cost of global cybercrime in 2023 will be 8 trillion dollars.

• Cybersecurity Ventures predicts that cybercrime related to cryptocurrencies will grow to: $30 billion annually worldwide by 2025.

• According to Cybersecurity Ventures, ransomware damages approximately 265 billion dollars (US dollars) Annual costs for victims will increase by 2031.

• In the technology field, phishing attacks are generally about 80% of reported cyber threats.

The increasing frequency of cyber threats has highlighted the critical role of cybersecurity for today's banking sector, especially small financial institutions and credit unions that lack the necessary resources to withstand financial losses from cyber attacks. I am. Furthermore, these institutions face the risk of significant reputational damage.

Financial institutions are facing an increase in cyber threats, highlighting the importance of having robust cybersecurity measures in place. In this blog, we will discuss these threats, discuss effective mitigation strategies, and highlight the resources available to strengthen cybersecurity in the BFSI industry.

What is cybersecurity in banking?

Cybersecurity in the BFSI industry involves protecting hardware and software components, including computers, servers, mobile devices, electronic systems, networks, and data, from malicious attacks.

In the banking industry, cybersecurity refers to the implementation of technologies and strategies to prevent attacks on networks, software, and sensitive information. These threats may include virus or malware intrusion, unauthorized access, hacking attempts, data breaches, etc. Banking cybersecurity, also known as information technology security or electronic information security, plays an important role in protecting users' assets, both monetary and data-related, especially in an increasingly cashless society where online transactions are widespread. will be fulfilled. Ensuring the security of these funds and their associated access information is of paramount importance to banks.

The importance of cybersecurity in the banking sector

There are many compelling reasons for banks to prioritize cybersecurity. Considering the huge volume of transactions that banks process on a daily basis, it is essential to protect data from cyber-attacks. The consequences of poor cybersecurity include:

customer loss

In the event of a cyberattack, banks may lose customer assets and cause significant customer distress. While some funds may be recoverable, loss of customer data typically poses a greater challenge. Therefore, it is essential for all banks to prioritize the protection of customer data.

Damage to bank reputation

Continuous breaches of a bank's customer data erode trust and lead customers to seek alternative banking services. Robust cybersecurity in banking processes is essential to prevent such incidents and maintain customer trust.

Digitalization of transactions

The shift to digital platforms for banking transactions has increased banks' vulnerability to hackers and malicious actors. Unauthorized access to these digital platforms poses significant risks and potential disaster for banks.

Common Cybersecurity Threats in the Banking Sector

As cyberspace evolves, threats become more complex and deceptive. Given the large amounts of financial assets and sensitive data involved, the banking sector must remain ever more vigilant. It's important to stay up-to-date on the most formidable cybersecurity threats in the BFSi industry. Here are some examples:

ransomware

Ransomware is a type of cyberattack in which hackers lock you out of your system and demand money to unlock it. If your organization does not have backups, it may be difficult for your organization to operate, and even if you pay the ransom, there is no guarantee that you will regain access or avoid future attacks.

cloud-based cyber attack

As more data moves to the cloud, cyber attackers are increasingly targeting cloud storage platforms. It is critical for banks to strengthen the security of their cloud infrastructure to protect against breaches that can lead to financial losses and data breaches.

supply chain attack

Hackers can compromise software suppliers and distribute seemingly genuine messages about updates and products to customers. However, these messages contain harmful code that compromises delivery systems and gives cyber attackers access to customer networks.

Types of cybersecurity solutions

As cyber threats evolve, it is becoming increasingly important for banks and financial institutions to maintain robust cybersecurity measures. Here are some key pillars of cybersecurity for the BFSI industry that can be implemented today.

cloud security

As organizations increasingly adopt cloud computing, ensuring the security of their cloud infrastructure becomes paramount. Some companies choose to implement customized third-party security measures to improve protection against cyber-attacks, particularly those targeting a company's financial systems. A robust cloud security strategy includes cybersecurity solutions, controls, and services designed to protect your organization's cloud infrastructure from potential threats.

mobile security

Mobile devices such as tablets often store data that cyber attackers can exploit to access company information. Cyber ​​attackers usually try to trick users into installing malicious mobile apps through phishing attacks and instant messaging attacks. Mobile security protects your organization from such attacks by protecting these devices and their operating systems. Given that employees regularly rely on mobile applications to access work-related information and resources, this is an issue that cannot be overlooked.

Application security

Many financial institutions rely on secondary applications that are frequently linked to the Internet, making them susceptible to attacks such as authentication failures, misconfigurations, and cross-site scripting. Application security is essential to prevent cyber-attacks and prevent malicious interactions with applications and APIs.

endpoint protection

Endpoint protection must protect systems from the user side, focusing on employee devices that access the organization's network, such as laptops and desktops.

If you want to learn more about endpoint controls, check out the following webinars: “The Critical Role of Endpoint Control and Compliance.”

network protection

Because networks are commonly targeted and considered critical, enterprises must prioritize robust network protection that effectively enforces secure web policies. A comprehensive network protection approach includes network analysis, proactive threat detection, and implementing automated security and response orchestration (SOAR).

Why does the BFSI sector need cybersecurity?

Cybersecurity in the banking sector plays an important role in the financial sector, as banks and financial institutions store huge amounts of highly confidential data. In the event of a breach, attackers could exploit this data and put it up for auction, causing significant financial loss to customers.

Additionally, the significant costs of data breaches highlight the importance of cybersecurity to the BFSI industry. The long time it takes to identify and contain a breach, on average 233 days, gives attackers plenty of time to carry out their malicious activities. Additionally, the widespread access granted to financial services employees, who typically have access to millions of files, highlights the sector's potential vulnerabilities. Cybersecurity in the BFSI industry is at considerable risk to sensitive data as cybercriminals target employees, making robust cybersecurity measures essential.

conclusion

The importance of cybersecurity in the BFSI sector cannot be overstated, given the critical role that financial institutions play in managing vast amounts of sensitive data and transactions. By implementing comprehensive cybersecurity measures, including cloud security, mobile security, application security, endpoint protection, and network protection, banks and financial institutions can effectively reduce cyber risks and protect their operations. A proactive approach to cybersecurity allows the BFSI industry to trust, protect customer assets, and maintain its reputation in an increasingly digital world.

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*** This is a Security Bloggers Network syndicated blog from Kratikal Blogs, written by Shikha Dhingra. Read the original post: https://kratikal.com/blog/role-of-cybersecurity-for-bfsi-industry/