What is the role of Cybersecurity in BFSI Industry?

In recent times, the need of cybersecurity products and services has increased rapidly across different sectors in which BFSI industry is one of them. Through this article, we’ll gain a thorough understanding about the importance of Cybersecurity in BFSI Industry.

Also, we will discuss about some of the major cyberattacks that are continuously happening in BFSI industry recently and some cybersecurity measures which employees working in BFSI industry can take in order to secure their banks against the danger of cybercrimes. 

Why is cybersecurity in the BFSI industry crucial?

Cybersecurity is critical for all types of businesses. However, it has become more significant in the BFSI industry as banks handle millions of transactions on a daily basis. Hence all banks must implement defensive security procedures to secure their data from cyber threats.

Here are some of the reasons why cybersecurity is important for banks:

1) The Danger of Losing Customers – Every bank must implement cybersecurity solutions in order to protect & secure its customer’s confidential or sensitive information. When a bank is subjected to a cyberattack, not only it jeopardises the bank’s reputation but also results in the loss of its customer’s assets. 

2) The Danger of Losing Reputation – Data theft is a serious issue for banks since it can result in the loss of customer data, which can lead to customers losing trust in the bank when their personal information is compromised. As a result, in order to analyse current safety measures and secure sensitive data, every bank must employ cybersecurity solutions. 

3) The Danger of Digitization – As we all know, almost everything has now been digitized from ordering products to scheduling meetings and sending money. This makes it critical for banks to improve their customer-facing banking activities, as hackers can easily gain access to banking apps if proper cybersecurity solutions are not implemented. 

What are the major cyberattacks faced by BFSI Industry?

Cyberattacks have become so common in the BFSI industry in recent times that it is now considered as one of the industry’s top concerns. Cybercriminals have made advancements in technology, strengthening their skills, making it difficult for banks to stop cyberattacks from happening each and every time.  

Here are some of the major cyberattacks which have been faced by the BFSI industry in recent times:

1) Phishing Attacks – Phishing attacks are one of the most common cybersecurity issues in the BFSI industry. They can be used to get access to a financial institution’s network and launch a more severe attack, such as APT (Advanced Persistent Threats), which can have disastrous consequences for the BFSI industry.  

2) Trojan Attacks – It is a malicious software program designed to get access to confidential data processed or stored by systems used for online banking. This type of software application has a gateway that allows anybody to gain access to a computer system. Hackers use trojans use to gain access to customer’s sensitive data.  

3) Ransomware Attacks – It is a type of cyberattack that corrupts vital data of bank owners and prohibits them from accessing it unless they pay a large fee or ransom. Because 90% of banking institutions have been hit by ransomware in the last year, it is a serious threat to BFSI industry. 

4) Spoofing Attacks – In this cyberattack, cybercriminals use a clone website masquerading as a financial website. They create a layout that is visually and functionally similar to an original website. Also creating a domain with a minor change in spelling or domain extension. When the customer inputs his or her login credentials after opening the spoofy URL, these cybercriminals steal and use them later to do financial cybercrimes. 

5) Data Manipulation Attacks – One common misconception about cyber attacks is that they are exclusively concerned with data theft. However, this is not always the case, as data manipulation attacks have become a more popular method for cybercriminals or hackers especially in the BFSI industry. Data manipulation attacks occur when a harmful entity acquires access to a target system and makes modifications to customer’s sensitive data which is stored in the bank’s database for their own personal advantage. 

Cybersecurity measures for employees working in BFSI Industry 

The primary purpose of employing cybersecurity in banking is to protect and secure the sensitive data or information of the customer. As more and more people are preferring towards cashless transactions, digital or online transactions have increased in a significant way which also have increased the probability ratio of cybercrimes happening frequently. 

Hence, it is important for all banks to follow these precautionary cybersecurity measures to secure the sensitive information of their customers:

1) Use of Multi-factor Authentication – It is a method of authentication in which access is granted only when a customer provides more than one login credentials. Passwords, and fingerprints can all be used as login credentials. Multi-factor Authentication is required by banks because it adds an extra degree of security when attempting to access sensitive information. 

2) Use of Cyber Insurance – It ensures the bank’s financial security in the case of a cyberattack happens, making it a critical component of a cyber security plan for banks. Along with reducing legal expenses, cyber insurance helps the firms to comply with data breaching rules and regulations. Furthermore, cyber insurance will assist in paying for the repair of damaged systems and the restoration of data. 

3) Use of Antivirus Applications – Firewall security is not sufficient enough to avoid cyberattacks from happening. Hence it is crucial for employees working in BFSI industry to use antivirus software applications on their systems like Norton, Avast, McAfee, Quick Heal AV total protection etc. 

The Conclusion 

Hence, from the above discussion about Cybersecurity in BFSI, we can conclude this article by saying that Banks must have adequate security measures and policies in place, especially if they retain a large amount of customer information as well as transaction lists. As digitalization progresses, hackers are more likely to target the BFSI industry. 

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FAQs

Q1) Why Cybersecurity in BFSI Industry is needed?

A1) Cybersecurity in BFSI industry is needed to protect the user’s valuables. The increase in online transactions has made a greater number of people go cashless. People use electronic payment techniques like debit and credit cards to perform cashless transactions, which must be secured by cybersecurity.

Q2) Which five factors pose the greatest risk to bank security?

A2) Following are the five major factors that poses a big threat to bank security: –

1) Data that is not encrypted
2) Unreliable Outside parties
3) Internal Security Risks
4) Phishing and spoofing attacks
5) Distributed Denial of Service (DDoS) attacks

Q3) Who is in charge of bank cybersecurity?

A3) The bank’s finance department will be in charge of overseeing compliance, testing, audits, and inventory, as well as leading the evaluation and coverage of cyber insurance policies.

Q4) How can banks defend against cyberattacks?

A4) Following are some of the precautionary measures that banks can take in order to defend themselves against cyberattacks:

1) Putting in place comprehensive business regulations that ensure adequate client data security,
2) Make sure that employee safety policies are in place and put suitable controls in place, such as password security, user account verification, and user login monitoring, to increase accountability.