In recent years, cyberattacks on financial institutions have increased at an alarming rate. This has caused huge business disruptions leading to financial instability and reputational damage. Cyber risk therefore forms a key threat to the financial stability of any organization.
The challenge however lies in finding solutions that will help keep the sources of attack at a distance. This will put priority on building a stronger cyber defense to minimize such attacks and bring in smooth functioning of the organization back on track. To minimize the impact of any cyber-attack which can happen any time, organizations always need to proactively apply various cyber security measures, keeping an eye on the evolving threat landscape.
Any cyber-attack can impact three important things in an organization. These are mainly as confidentiality breach of consumer data and vital information being leaked by third party. Risk of data being available to cyber criminals and last misuse of such data which in turn can question the integrity of any financial institution.
In July 2018 fraudsters hacked into Canara bank ATM servers and wiped off almost 20 lakh rupees from different bank accounts. The number of victims was over 50 and it was believed that they were holding the account details of more than 300 ATM users across India. The hackers used skimming devices on ATMs to steal the information of debit card holders. This incident reflects the impact of cyber-attack causing financial instability.
What we understand is that if banks or any financial institutions are not alert then hackers will always look forward to the point from where they can enter the internal banking system which they have done in the past. This can create disruptions by ways of stealing data, major information and fully exploit the same. Any attack on the network or system can land hackers inside the system exploiting client’s vital information, diverting payments resulting into fraud and cybercrime.
A recent example of such attack was in August 2018, when Cosmos Bank faced a cyber-attack, resulting in nearly Rs 100 crore loss due to presence of some malware. Data shows people are avoiding going to banks on regular basis as mobile apps are gaining popularity to facilitate easy payments and transfers. However these apps can create more set of vulnerabilities and banks have to remain prepared to address them.
A 2018 study from Accenture reported on Cybersecurity of 30 major banking apps, in which at least one known security risk identified prevalent in each of the apps. Again 25% of the apps had one “high-risk security flaw.” Their vulnerabilities included insecure data storage, insecure authentication and code tampering.
Crypto currencies and bitcoins are forming major part of investment for customers. Big banks and big financial institutions are also going for crypto trading and this will be growing in coming years. Digital currencies will be ruling the financial industry in coming years.
Experts say, that dealing in crypto has its major drawbacks. These digital currencies are also not free from security risks, as cybercriminal have proved that every one is a target. For example in the year 2018, 500 million XEM coins (native cryptocurrency of the NEM project) was stolen from the Hot Wallet of Tokyo-based crypto exchange Coincheck. It took ten months to resolve the issue. Coincheck has once again resumed its trading services. This particular attack sets a dangerous example for hackers as digital banking gets prominent.
Another Japanese exchange came under attack in 2018 where hackers accessed the exchange’s hot wallets, which resulted in the loss of $60 million worth of crypto assets, including monacoin, bitcoin cash, and bitcoin. The owner of the exchange,Tech Bureau Corp. promised to cover the losses of all affected customer.
Kim Grauer, a senior economist at Chainalysis, said that “crypto exchanges have become the target of every hacker and hacking group on a global scale, but exchanges have not been able to cope with the pressure and integrate strong security measures to combat intense attacks”.
Towards the end of 2018 a new trend emerged known as SIM SWAP hacks. The SIM swap method actually gives the criminal to access individual crypto wallets. By using SMS backup it’s possible to bypass two-factor authentication commonly used to protect the digital fortunes. For example Robert Ross, an angel investor from San Francisco, lost around $1 million due to the SIM swap. Christian Ferri, the head of BlockStar lost over $100,000 and these are just to name a few.
Mitigation of Cyber Risks to Minimise Loss
Mitigation of Cyber risk to minimize losses at large scale forms a very important strategy for financial organizations. This not only spares them from various cyber threats that looms large but also stops creating scope for cyber criminals to profit.
It is suggested by experts that by continuously updating the related web and following mobile security practices they can remain unaffected. Doing regular testing, patching and blocking malware effectively will help the websites to remain unaffected.
The value and popularity of cryptocurrencies has grown significantly in the recent years, making these types of currencies a very attractive target for financially motivated criminals. Therefore it is important to maintain a strong network security, the roles and responsibilities of each type of participant in a blockchain network must be clearly defined and enforced.
This year on January 5, 2019, the cryptocurrency company Coinbase detected a possible eclipse + 51% attack effecting the Ethereum Classic (ETC) blockchain. The attack involved malicious nodes surrounding Coinbase nodes, presenting them with several deep chain reorganizations and multiple double spends – totalling 219,500 ETC (roughly $1.1 million USD).
Likewise banking and other financial institutions need to prepare and protect themselves by understanding the vulnerabilities and risk associated with cryptocurrencies and crypto trading.
More layers of encryption are suggested by experts to make sure the websites are secured. Also various Internet banking security software are recommended that can keep the online banking sessions safe. The online banking infographic about Online Money transactions advises that the right security software which has the ability to open the sites one frequently uses in a special, protected mode and keep personal data safe from cybercriminals.
Clients and staff of financial institutions should be informed regularly about upcoming risks such as different type of attacks like phishing etc in order to have strong cyber security hygiene. Timely detection can prevent a fraudulent activity. This will further strengthen banks and other financial institution relationship with their clients.
Clients also need to understand that since cybercrime is evolving every day it is important to implement strong authentication, safer encryption methods to have safe transactions. At times clients also view cyber-security systems to be more complex to implement. To make it easy clients need to be provided with the right information and awareness campaign about emerging cyber threats. This also increases the responsibility on part of banks where they need to implement strong cyber defences in order to be more secured and avoid any breaches.
Network and open ports are to be examined regularly so that it becomes easier to understand if the organizations are using some of the best practices.This can include staying up-to-date with current protocols, or securing endpoint network to ensure external access to internal systems is minimized.
For Cyrpto currency trading and security, there are two types of keys associated with each wallet: a public key and a private key. Each of these keys provides a different function, and it is the security of the private key that is most important to securing cryptocurrency funds.
The private key must be kept secret at all times. Revealing it to third-parties or allowing third-parties to manage and store private keys may increase security issues. In fact, some of the most high-profile exchange breaches have occurred in large part due to a lack of operational controls relating to the storage of private keys.
Individual users generally go for user-controlled software wallet solutions to store the private and public keys in a wallet file on the user’s hard drive that is located in a well-known directory. This makes the criminals more active to target the wallet files to steal the keys. FireEye has observed myriad malware families, traditionally aimed at stealing banking credentials, incorporate the ability to target cryptocurrency wallets and online services.
Therefore to mitigate the risk in crypto, FireEye Networks suggested that users use two-factor authentication when available (as well as fingerprint authentication where applicable).This is followed by using of strong passwords and regularly changing the passwords. Further to this the private keys are to be stored in encrypted form if possible.
FireEye also suggested in its recommendation that using an alternative or secondary device to access funds (like a secondary mobile device or computer not generally used every day) and to be kept offline when not in use.
As organizations are becoming increasingly reliant on third-party vendors for their day-to-day operations, these vendors must be continuously monitored for cybersecurity vulnerabilities. Lack of awareness in regards to third-party security could cost banks millions in 2019 as predicted by various reports. Recognizing the potential risk from third parties when outsourcing and creating awareness forms a major tasks for financial organizations. This will also help third party vendors to take enough measures to protect crucial data.
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