Cybersecurity in banks is absolutely critical. Losses from attacks on payment systems are increasingly costly.
As the world becomes more digitally connected there are numerous cybersecurity challenges to take into account.
Cybersecurity in payments requires flexible, strong and adaptable technology to combat threats before they even occur. Attacks are more sophisticated and now target the entire payments life cycle.
Happening more frequently, banks and financial organisation are under more scrutiny from governments and regulators.
A firm grasp on the payments life cycle, including locating points of failure and areas prone to attack is critical in preventing a fraudulent attack.
Cybersecurity in banks: the avoidable TSB chaos
A prime example of what can happen if banks don’t take cybersecurity in payments seriously is TSB’s IT chaos.
Throughout 2018 the bank was plagued with IT meltdowns that caused executives to abandon ship and regulators to put their foot down.
It all began in April 2018 when TSB notified its customers that upgrades to its systems would be carried out. During this time, users would not be able to access services such as online banking, making payments and transferring money.
The upgrade started that migrated TSB customer accounts from the previous system that was operated by Lloyds Banking Group over to another system that had been designed by TSB’s current owner, Banco Sabadell.
For a number of reasons, this migration failed and numerous customers took to social media to complain that they couldn’t view their accounts. The chaos continued and shockingly, some customers stated that they could view and access other accounts. One man reported that he could view other customer’s accounts, totalling more than £20,000 ($28,000).
Being able to access other people’s account is a massive failure in security and abuse of privacy. The failed migration saw up to 1.9 million customers blocked from their accounts.
Overall, the turbulent months of IT failures caused the bank to suffer an overall of £107.4m for the first six months of the 2018.
Around 26,000 customers closed their accounts with TSB as a result of the problems caused by the migration.
How to improve cybersecurity in banks
As hacks get more sophisticated, so too must the technology to fight them. In many ways the financial industry has upped their game when it comes to beating cyberattacks.
With the launch of the SEPA Instant Credit Transfer scheme, European payments fully entered the real-time world. This measure posed a challenge for fraudsters.
Instantaneous services within the payments sector are incredibly difficult to hack into. The speed and security at which a payment moves at is almost impossible to replicate.
Another solution to improving cybersecurity in payments is embracing the use of blockchain.
Fraud and cyber crime is the top concern for banks around the world.
Blockchain was originally created to prevent fraudulent attacks in digital currency exchanges by cutting out the middle man in the transaction process. Today, the technology has evolved significantly and now banks are looking at ways it can support its fraud prevention strategies.
Fraudsters are always looking for new, more effective ways to exploit the financial sector. Being proactive with cybersecurity in payments will ultimately protect the consumer and the bank.