The days of bank robberies wherein masked intruders used to rush in with weapons and leave with the money is now a thing of the past. The digital era has led to the emergence of dark and unholy world of cybercrime in which tech-savvy robbers aka hackers don’t need to be present physically to rob a bank. All they need to do is find a loophole in the cyber defence mechanism of financial institutions and they can enter virtually and walk away not only with the money but also the critical data that can be misused in several ways.
Cyberattacks in BFSI: The Dark Side of Digital Era
Banking, Financial Services, and Insurance (BFSI) sector have aggressively transformed themselves and leveraged technology to meet the evolving requirements of their customers. From managing records on paper to offering various digital services such as online purchases, premium payments etc. While this digital transformation has improved the customer experience and increased the bottom-line, the security concerns for BFSI sector have increased too. The sector is subjected to several attacks ranging from phishing attacks, DoS attacks, spear-phishing, ransomware, malware attacks etc. that try to steal money and sabotage the brand’s reputation. Governments and regulatory bodies across the world have emphasized heavily on strict security protocols and technology to stop these attacks.
5 Ways in which Cyberattack can impact BFSI players:
- Financial losses: In addition to the direct financial losses, there are also in-direct losses in the form of cost of investigation, cost of recovery, decreased revenue etc.
- Damage to reputation: The financial losses can be temporary but the long-term loss of cyberattack can be the damage to brand’s reputation. The market scenario is extremely competitive and any cyberattack that tarnishes brand image may lead to existing customers and partners that have trusted you to turn away.
- Loss of sensitive data: Data has become the new currency. Cybercriminals are increasingly going after data rather than money as the data can be more valuable. BFSI players hold a lot of sensitive data that belongs to customers and that makes them one of the prime targets for cyber-attack.
- Reduced productivity: A cyberattack can impact the business’ continuity and/or hamper the productivity, especially if the critical application goes down. This, in turn, has negative impact on the bottom-line.
- Legal liability: BFSI sector is heavily governed by regulatory bodies. Apart from any regulatory obligations and fines that arise out of cyber-attack, organizations can also face civil lawsuits from affected customers and business partners if they are found not practicing the desired security measures.
Here are some of the steps that BFSI industry can adopt to combat cyber threats:
- Comprehensive cybersecurity architecture that includes:
- Multi-layered email strategy
- Pro-active threat detection mechanism
- Database activity monitoring system
- Advanced authorization/authentication system
- Digital certificates etc.
- Periodic training to business stakeholders: Cybersecurity is not IT department’s job alone. All the stakeholders of the business need to act responsibly and adhere to security guidelines to ensure that there are no loopholes that can be exploited by hackers.
- Consumer awareness is a must: Cybersecurity must be practiced at all levels and it is crucial that customers be made aware of any unscrupulous activity related to their accounts so that they don’t fall prey to hackers.
- Security policy enforcement: Comprehensive cybersecurity policy is the need of the hour. The policy must explain the rules for how employees, consultants, partners, board members, and other users who access various applications and internet resources and send data over network. Most importantly, there should be a strong enforcement of the policy i.e. the failure to adhere to the same must lead to strict action.
Let’s conclude on a secure note
Cyberattacks are now considered as one of the most dangerous man-made threat and this makes it imperative for organizations to make cybersecurity an integral part of the business continuity strategy. The risk can never be eliminated but it can always be mitigated if planned well (the above-mentioned measures can help). BFSI players need to set up cybersecurity teams internally and seek help of third-party vendors or managed security services providers (MSSPs) to have a comprehensive cybersecurity architecture in place in order to protect all the stakeholders including customers, partners and employees.