Introduction

The banking industry is a prime target for cybercriminals due to the vast amounts of sensitive data and financial assets it holds. In 2023, banks worldwide faced an escalating number of cyber attacks, with the average cost of a data breach reaching an all-time high of $4.24 million. As we move into 2024, the cybersecurity landscape is expected to become even more complex and challenging for banks. This blog post will discuss the top 8 cybersecurity challenges that banks will face in 2024 and provide strategies for mitigating these risks.

Cybersecurity Challenges and Strategies for Banks

Ransomware attacks

Ransomware attacks are a major threat to banks, as they can encrypt critical data and hold it hostage until a ransom is paid. In 2024, banks will need to be prepared to defend against these attacks by implementing robust data encryption and backup strategies, as well as training employees on how to identify and avoid phishing attacks.

Strategy: Implement robust data encryption and backup strategies, train employees on how to identify and avoid phishing attacks, and practice data breach simulations.

Cloud security threats

As banks move more of their data and applications to the cloud, they need to be aware of the new security risks that this poses. In 2024, banks will need to implement strong cloud security controls, such as identity and access management (IAM), data encryption, and vulnerability scanning.

Strategy: Implement strong cloud security controls, such as identity and access management (IAM), data encryption, and vulnerability scanning, and regularly monitor cloud environments for suspicious activity.

Artificial intelligence (AI) and machine learning (ML) attacks

AI and ML are increasingly being used by banks to automate tasks and improve decision-making. However, these technologies can also be used by cybercriminals to launch new and sophisticated attacks. In 2024, banks will need to be aware of the potential risks of AI and ML attacks and implement appropriate security controls.

Strategy: Implement strong AI and ML security controls, such as anomaly detection and model monitoring, and educate employees on the potential risks of AI and ML attacks.

Phishing attacks

Phishing attacks are a common way for cybercriminals to trick bank customers into revealing their personal information or clicking on malicious links. In 2024, banks will need to continue to educate their employees and customers about phishing attacks and implement technologies that can detect and block phishing emails.

Strategy: Continue to educate employees and customers about phishing attacks, implement technologies that can detect and block phishing emails, and use multi-factor authentication (MFA) to protect accounts.

Insider threats

Insider threats are a major concern for banks, as they pose a significant risk of data breaches and financial losses. In 2024, banks will need to implement strong access controls and data loss prevention (DLP) solutions to protect their data from insider threats.

Strategy: Implement strong access controls, data loss prevention (DLP) solutions, and employee monitoring tools, and conduct regular background checks and security awareness training for employees.

Cryptojacking

Cryptojacking is a type of attack in which cybercriminals hijack a victim’s computer to mine cryptocurrency. In 2024, banks will need to be aware of the risk of cryptojacking and implement security controls to protect their systems from this type of attack.

Strategy: Implement security controls to protect systems from cryptojacking, such as endpoint protection software, ad blockers, and script blockers.

Legacy system attacks

Many banks still rely on legacy systems that are not designed to withstand modern cyberattacks. In 2024, banks will need to invest in modernizing their legacy systems or replacing them with more secure alternatives.

Strategy: Modernize legacy systems or replace them with more secure alternatives, and segment legacy systems from other networks to limit the impact of a breach.

Internet of Things (IoT) security limitations

The increasing number of IoT devices connected to bank networks poses a new security challenge. In 2024, banks will need to implement security controls to protect these devices from cyberattacks.

Strategy: Implement security controls to protect IoT devices, such as device authentication, encryption, and firmware updates, and segment IoT devices from other networks.

Examples of cybersecurity attacks in banks

1. Flagstar Bank ransomware attack (2020)

In 2020, Flagstar Bank, a large regional bank in the United States, was hit by a ransomware attack that encrypted its systems and disrupted its operations for several days. The attackers demanded a ransom payment of $42 million, but the bank did not pay the ransom and eventually restored its systems from backups.

2. New Zealand Stock Exchange DDoS attack (2020)

In 2020, the New Zealand Stock Exchange was hit by a distributed denial-of-service (DDoS) attack that overwhelmed its systems and forced it to shut down trading for several hours. The attack was part of a larger campaign targeting financial institutions around the world.

3. BancoEstado ATM skimming attack (2021)

In 2021, BancoEstado, the largest bank in Chile, was hit by an ATM skimming attack that targeted over 100 ATMs. The attackers installed skimming devices on the ATMs to steal customer card information. The attack resulted in losses of over $2 million.

4. RBI SWIFT Hacking Attempt (2018) 

Hackers attempted to steal over ₹200 crore ($27.5 million) from the Reserve Bank of India (RBI) using the SWIFT messaging system, but the RBI’s security measures prevented the theft.

5. Yes Bank Malware Attack (2019) 

A malware attack targeting Yes Bank ATMs and PoS terminals allowed hackers to steal over ₹130 crore ($18.1 million) from the bank’s customers.

Solutions to cybersecurity challenges in banking

• Strong Governance and Risk Management: Establish a clear cybersecurity framework and governance structure to oversee and manage cybersecurity risks effectively.
• A Culture of Cybersecurity Awareness: Foster a culture of cybersecurity awareness within the organization by providing regular training and education to all employees.
• Regular Security Assessments and Testing: Conduct regular security assessments and vulnerability testing to identify and address potential security weaknesses before they can be exploited.
• Incident Response Planning and Testing: Develop and maintain a comprehensive incident response plan to effectively respond to and manage cybersecurity incidents.
• The Use of Security Analytics and Automation: Utilize security analytics and automation tools to enhance threat detection, incident response, and overall security monitoring capabilities.

Conclusion

The banking industry faces an ever-evolving threat landscape, with cybercriminals constantly devising new and sophisticated ways to attack financial institutions. As banks continue to adopt new technologies and expand their digital offerings, they must remain vigilant and proactive in their cyber threat protection efforts. By implementing comprehensive cybersecurity strategies, banks can protect their valuable data, their customers’ sensitive information, and their overall reputation.

Cybersecurity is an ongoing journey, not a one-time event. Banks must continuously adapt and refine their cybersecurity strategies to stay ahead of the evolving threat landscape. By prioritizing cybersecurity and embracing proactive measures, banks can safeguard their assets, maintain customer trust, and ensure their long-term success in the digital age.