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Cybersecurity in banking holds a critical value. Since the advancement of digital payments and digitization of the financial ecosystem, banks have become a primary target of cyber-attacks. A report by Cybersecurity Ventures estimates that the global cost of cybercrime will rise to $6 trillion a year by the end of 2023 and this was estimated before the COVID-19 pandemic took over the world and another report by Cybersecurity Ventures expects global cybercrime costs to grow by 15 percent per year over the next five years, reached 10.5 trillion USD annually by 2025.
The rapid digital transformation in the past few months has significantly affected how cybercriminals operate. These changes will further impact the banking cybersecurity landscape in 2023. Moreover, the continuous change in technologies also implies a parallel shift in cybersecurity in banking. Here are a few cybersecurity trends in banking in 2023.
Addressing the security risks in digital banking platforms
The rapid adoption of digital banking during the pandemic has made mobile apps and web portals a target for cybercriminals. Exploiting vulnerabilities like weak authentication and insecure data storage, hackers are leveraging techniques such as trojans and fake apps.
- Rise in Digital Banking Adoption:
- A sharp increase in customers opting for digital banking due to the global pandemic.
- Preference for cashless payment alternatives, including mobile apps and web portals due to ease of use and security.
- Common Vulnerabilities in Digital Banking Platforms:
- Insecure data storage which could lead to potential security and privacy breaches.
- Insufficient authentication mechanisms exploited by hackers.
- Direct code tampering vulnerabilities in apps and web portals.
- Cybersecurity Focus in Banking:
- Banks are expected to invest heavily in advanced cybersecurity measures to protect their platforms and users.
- Emphasis on addressing vulnerabilities and preveting sophisticated cyberattacks.
Identifying and preventing risks in third-party collaborations
The banking sector’s heavy reliance on third-party vendors for innovative solutions introduces significant cybersecurity challenges. With increased vulnerabilities from interconnected systems and APIs, banks face the critical task of monitoring third-party practices and infrastructure. Strengthening these collaborations and securing external integrations will be a top cybersecurity priority for the banking industry in 2023.
- Monitoring Third-Party Vendors:
- Banks must ensure vendors follow robust cybersecurity practices.
- Regular assessments of third-party systems to identify potential risks.
- Focus on API Security:
- Examination and improvement of APIs to prevent data breaches.
- Ensuring secure integration with third-party systems.
- Full Visibility Over Third-Party Infrastructure:
- Security teams aim for complete monitoring of third-party operations.
- Actively detecting and controlling risks.
Artificial Intelligence for fraud prevention
Artificial intelligence (AI) is emerging as a crucial tool in the fight against fraud in the banking sector, addressing one of the industry’s most significant challenges. As financial institutions are working to contain the risks and secure their operations, AI in banking is expected to play a central role in shaping more effective fraud prevention strategies in 2023 and beyond.
- Impact of Fraud on the Financial Industry:
- AI technologies are increasingly utilized for fraud detection and prevention in banking.
- Fraud remains one of the biggest challenges, causing significant financial losses annually.
- Advancements in AI for Fraud Detection (2023):
- Since the early 2010s, banks have employed AI techniques to identify anomalies and detect fraud.
- AI now detects various types of fraud, including payment fraud, loan fraud, and onboarding fraud.
- Advanced machine learning models enable near real-time detection of suspicious transactions.
- Behavioral Monitoring and Customer Profiling:
- AI supports in-depth monitoring of customer behavior to identify unusual patterns.
- Individual profiling provides actionable intelligence to mitigate risks proactively.
Read our article on Robotic process automation in security
Reducing security vulnerabilities in the adoption of advanced technologies
As financial institutions increasingly adopt advanced technologies addressing security vulnerabilities has become a critical focus in 2023. While these innovations promise better efficiency, they also introduce new cybersecurity risks that can expose banks to complicated attacks. To safeguard their operations, banks are adopting holistic security measures that encompass the protection of connected devices and infrastructure against multi-vector threats, ensuring a strong defense in an evolving digital landscape.
- Emerging Technologies in Banking and Its Risks:
- Advanced technologies like IoT and 5G are expected to showcase their potential across industries, including finance.
- These technologies bring efficiency but also introduce new cybersecurity risks.
- IoT devices can be susceptible to fifth-generation (Gen V) cyber-attacks.
- Such devices increase exposure to multi-vector attacks targeting IT infrastructure, cloud systems, and endpoints.
- Holistic IoT Security Approach:
- Banks will adopt complete IoT security measures to contain risks.
- Strategies will focus on securing connected devices, protecting data, and fortifying infrastructure against advanced threats.
- Focus on Multi-Vector Attack Protection:
- Increased security for cloud instances, endpoint devices, and IT networks.
- Focus on preventing vulnerabilities from spreading across connected systems.
Conclusion
Cybersecurity is not limited to IT industries, in this digital world, it is necessary for every business, especially for financial institutions such as banks. The banking sector’s ongoing digital transformation has caused the industry’s potential attack surface to grow, exposing it to increased levels of cyber threats. Thus, these are the cybersecurity trends in banking in 2023, and with the right tools, resources, and strategies, financial institutions can protect themselves from the rising risk of cyberattacks.
At Intone, we understand the technologies and banking regulations that are now unlocking the banking value chain. Our team of global security specialists can deliver you a focused risk-based security strategy, operating model, and compliance plan that builds security from an intelligent infrastructure that is predictive.