As the connectivity and transactions among the consumers become digitized the risks of cyberattacks rise. The banking, financial services and insurance (BFSI) sector is more prone to it for various reasons. We will get into those details later. As the use of mobile phones and the internet increases, the cybersecurity issues are increasing. The main reason for this is the vulnerabilities in the apps and poor security practices put in place by the app owners.
Breaches in security are becoming more sophisticated and organized and are causing the organizations to lose millions of dollars. Now the days of daylight robbery with armed gunmen are almost behind us. Prodigious masterminds now plan and carry out high-tech heists and invasions online.
One example of such a great heist is from Bangladesh. Hackers tried to steal $1 billion but a simple typo in one of the instructions stopped the robbery. Still, they succeeded in stealing $80 million. The hackers planned a malware attack and sent fraudulent instructions for transfer to the bank. The bank would have been at a huge loss if it wasn’t for that typo.
Why is the BFSI Target for Cyber Attacks?
- They can steal the money.
- They can steal customer data. Since information about customers is now considered the new gold, hackers can target banks and other similar institutions to steal the data. Equifax, a credit reporting agency, suffered a hacker attack. The personal information of about $147 million people was exposed.
- Financial institutions are an important part of the economy. They are more likely to pay the ransom in case of a hacker attack since they need to continue their operations. One Canadian company had to pay $950,000 in ransom because their computers were hit by a ransomware.
Things that the BFSI Sector Should Know
- The BFSI sector is not invincible, they are very prone to cyberattacks. The size of the organization or the complexity of their operations won’t matter. Hackers can monetize a large number of attacks on small operations. Larger organizations appear even more attractive to the hacker. Because the money or the customer data they can give will be large.
- All devices are prone to cyberattacks. Whether you use a computer or a mobile phone, you are vulnerable. Phishing attacks are designed for the user and not the device. Even the most secure device in the world will not be able to protect you if you are misled by a cyber conman into transferring money.
- Even your current or former employees can use the information they have about you and use it to steal money or data from you.
- Statistics say that 1 in 3 cyberattacks on banks is successful. You should always be prepared for the worst.
Challenges that BFSI Cybersecurity Faces?
We live in the age of innovation and technology but using it can come at a price. We, for example, have artificial intelligence. It has a lot of potential in various industries. It can supplement your security system there is no doubt there. But it can also pave way for an onslaught of AI-based cyberattacks. However, organizations can only combat what’s in front of them. Organizations should do their best to encourage enterprise-wide vigilance. They should also increase the visibility of the processes. This could prove beneficial in combination of the solutions they already have.
Demands of the Customers
As the society modernizes the demands of customers also increase from mobile apps. These apps are being downloaded at a rate never before. This necessitates that the demands be accepted and met. But meeting these demands can lead to cybersecurity issues. Because to meet the customer demands, you keep updating and changing the app. The constant tweaking increases chances for flaws in the security system of the app.
Malicious actors can take advantage of even a small weakness. That is why the organizations must keep the balance between meeting the demands their users and not compromising their security. After all customers may overlook slight outdated interfaces but not financial theft or leakage of their personal information.
Weakness from a third party can also create problems for the BFSI. Since most BFSI have tight security measures in place malicious actors look for other ways of entry. They often then target the third party vendors for this purpose. BFSI sectors cannot tolerate this because it won’t just cost them millions in money but customers as well. That is why they must extend their security measures through third-party risk management.
Is AI Solution to BFSI Cybercrime?
Simple anti-virus solutions won’t even be enough for stopping the modest hackers out there. What the BFSI sector needs is an efficient security system that adapts automatically with the hackers. It should regularly be able to update its knowledge base. To build such as system AI technology is required. AI-based technologies can complement the current security system.
It can scan all the anomalies that are non-signature behavior. The SIEM serves a limited purpose on its own but if it is accompanied by artificial intelligence, it can detect threats and anomalies that are waiting for the right time. So, yes, the use of AI can help banks and other financial sectors detect deviations that could be threatening.
Benefits of AI in Banking
Thanks to artificial intelligence, compliance is constantly changing in banking. Also, financial institutes now have to adapt to the regulatory changes in real-time in the workflows. AI-based technologies have the following benefits for the BFSI sector.
Regulations and Compliance
The compliance team of a bank can put to use the abilities of AI and stay on top of the new compliance and regulation documents that detail the new changes. Normally a member of the compliance team has to read and closely go through every single line of the document and then consider what applies best to the infrastructure of their organizations. Now AI does all the heavy lifting of going through the documents, examining the best possible solution and modifying the solutions as required.
Detection of Fraud
AI fraud detection technology collects and goes through all the customer data online and makes sure that the banking activities line up with the user profiles. When that data is combined with the internal data of the financial institutes, very accurate fraud detection is achieved in real-time. Also, the chances of false flags are decreased.
A few years back, a user risked getting locked out by the bank when he or she swiped the card in some other part of the country. The AI-powered technology these days allows the bank to have the geolocation, transaction history, airline ticket social media post and much more of the user.
Is AI Fundamental to the Future of Cyber Security?
Yes, AI-based technologies might be the only solution to the threats of cybercrime in the future. The AI-powered software does the predictive analysis. They let you know beforehand about the potential breaches in your system. Their process is far more efficient and faster than a human eye. They can also estimate the time and location of the potential cyberattack. This leads to accurate detection and concentrated fortification. While there is still a lot to be done in this field the cybercrime and AI together are shaping a bright future for cybersecurity.
AI can Make-up for the Security Shortage
According to a source, about 51% of respondents from different organizations claimed that their security team lacked cybersecurity skills. This shortage is alarming. BSFI sectors are feeling the impact of a shortage in cybersecurity staff. Skilled talent is very rare. AI can help with this, it can amplify the limited abilities. AI can automatically scan the dataand find threats. It doesn’t have to go through every network manually.
AI is very fast compared to humans. It can scan millions of possibilities in the blink of an eye. According to another source, machine learning was able to detect and save many systems from ransomware attacks. It is much more efficient than common antivirus software and systems.
However, it is important for the security team to provide feedback to the system based on AI and machine learning technologies so that it can take that into account and work better for the future. The time and effort one invests in it will improve its predictive abilities and in return the cybersecurity system.
Until recently the BFSI sectors were not that keen on adopting the latest technological advancements. But the continuous frauds and the creative security breaches have forced the BFSI sectors to reboot their security system. The excessive use of the internet has led to a rise in identity fraud in the banking industry.
AI is yet gaining its momentum but it has demonstrated its potential enough for us to believe that it can be the answer to the cybersecurity issues in BFSI. AI can improve the security system and do all the hard work while humans approve these suggestions and take the final decision. Organizations should look for a multilayered security strategy, including using audit services.