Like many other industries,
banking has been gradually undergoing
a digital transformation in recent years.
This digital revolution has brought new and exciting opportunities,
for both businesses and individuals.
The convenience of online banking is undeniable.
With a few clicks, you can check balances, transfer funds or pay bills.

However, with great convenience comes great responsibility,
especially when it comes to cybersecurity.
Banks are constantly under siege from attackers looking
to exploit vulnerabilities and steal customers’ hard-earned money
or information that could be leveraged in a ransom or sold on the dark web.

Cyberattack stats and consequences in banking

Statistics and recent incidents paint a picture
of the current landscape being faced by banks.
They, along with other kinds of institutions
in the financial industry,
are prime targets for cybercriminals. Here is what the stats report:

• A 2023 DDoS report
  informs that one-third of all distributed denial-of-service (DDoS)
  attacks were directed to the financial sector,
  making it the most targeted industry.
• A report by Sophos about the state of ransomware attacks
  indicated that financial services, including banks,
  continue to be a highly targeted market,
  going up from 55% in the 2022 report to 64% in the 2023 report.
• IBM’s 2023 Cost of a Data Breach Report
  estimates that the average cost of a cyberattack
  on a financial institution is approximately $5.9 million.
• Between 2019 and 2020,
  financial services
  around the world were fined $10.4 billion
  by regulatory entities for noncompliance.
• Fortunly
  reported that 92% of ATMs are vulnerable to attacks.
• U.S. regulators fined
  the bank Capital One $80 million
  after a data breach in 2019.
  The data breach exposed the information of around
  100 million users in the U.S. and about 6 million in Canada.

The repercussions of successful cyberattacks on banks can be profound.
There’s always the possibility of financial loss associated with stolen funds,
ransom payments, attorney fees, recovery expenses, among others.
Banks may face hefty fines for regulatory violations as well.
Another repercussion is the downtime from an operational disruption.
Reputational damages,
a decline in trust and loss of customers are the less
than desirable but most likely consequences
a bank could face after an incident.

Cybersecurity regulations in banking

Banks operate under rigid regulatory frameworks
that are meant to ensure the security of financial systems,
including the protection of customer data.
Regulatory entities change from country to country,
but they all look for ways to protect the end-customer.

For example, in the United States,
there are several mandatory regulations to comply
with, like:

• The interagency authority FFIEC
  (Federal Financial Institutions Examination Council)
• The policies and standards for cardholder protection
  PCI DSS
  (Payment Card Industry Data Security Standards).
• The European Union has the GDPR
  (General Data Protection Regulation)
  that determines how data is used and protected for EU citizens.
• The UK has its equivalent, the Data Protection Act.
• Singapore has the regulatory agency MAS
  (Monetary Authority of Singapore).
• Canada has the OSFI
  (Office of the Superintendent of Financial Institutions).

And so on.

Compliance with these and other regulatory bodies requires
constant updates to protocols that should include preventive
security testing,
comprehensive incident reporting and regular audits,
thus ensuring robust cybersecurity measures that banks need to follow.

Banking cybersecurity challenges

Banks traditionally operate
with separate departments which use different systems
and try to reach their own goals.
This lack of integration has hindered growth,
restricted scalability,
diminished customer satisfaction and facilitated the propagation
of security vulnerabilities.

The current banking landscape involves a vast network
of interconnected technologies,
which include mobile platforms to cloud services.
This linkage enlarges the attack surface
(i.e., creates many potential entry points for cybercriminals).
Other circumstances, like an increase in reliance on digital channels,
customizable cloud environments and the usage
of third-party software have also created a larger attack surface.

Other challenges are fueled by several factors.
Outdated legacy systems and a lack of proficiency
by an unprepared staff need to be considered.
Evolving cybercrime tactics like social engineering
and spear-phishing attacks,
advanced tools like exploit kits,
and even machine learning manipulated to leverage vulnerabilities
are also contributing factors to the proliferation of cyber threats.

Importance of cyber hygiene in banking

A culture of cyber hygiene in banks fosters
a more secure digital banking environment.
It seeks to protect valuable assets,
maintain customer trust,
meet regulatory requirements and ensure operational stability.
It’s more than just implementing technical solutions;
it’s about creating a shared responsibility
where both employees and customers understand
the importance of good cybersecurity practices.
This collective approach is vital to prevent data breaches,
malware installation,
and other incidents that can disrupt the banking services.

Banking cyber hygiene

Here are key practices to cultivate
robust cyber hygiene within a bank institution:

• Robust security framework: Implement a comprehensive
  security framework like NIST Cybersecurity Framework
  or ISO 27001.
  These frameworks provide a structured approach to identify,
  protect, respond to and recover from a cyberattack.
  Another framework that we recommend
  is the Zero Trust Security Model,
  and its solution ZTNA.
  Zero trust is based on principles like least privilege,
  continuous authentication and monitoring
  microsegmentation and breach assumption.
  All of these add up to enhance a bank’s cybersecurity posture.

• Regular risk assessment: Conduct regular risk assessments
  to identify potential threats to the IT infrastructure,
  applications and processes,
  as well as their impact and likelihood.
  This will help create a risk management strategy that contributes,
  among other things, to prioritize
  and manage vulnerabilities quickly and effectively.

• Data privacy as a priority: One of the main concerns
  of regulations and laws is this item.
  Data protection includes several processes and practices
  that we discussed in another blog post.

• Multi-layered security: Implement a layered defense with firewalls,
  intrusion detection systems, data encryption and the highly recommended MFA.
  Multi-factor authentication adds an extra layer
  of security as it goes beyond passwords.
  It requires multiple forms of authentication,
  such and it can be required of employees, customers, and even suppliers.

• Continuous monitoring and testing: Continuously monitor network activity
  and security systems for vulnerabilities so they can be
  promptly detected and addressed.
  This includes regular penetration testing
  (which is mandatory
  in some standards, e.g., PCI DSS, SWIFT CSCF)
  and vulnerability scanning.
  Both are solutions provided by Fluid Attacks,
  with its hacking team’s expertise adding
  to the scanning capabilities of its automated tool.

• Incident response plan: All banks should have an established
  and clear incident response plan
  that outlines procedures for detecting,
  containing and recovering from cyberattacks.

• Third-party vendor management: Before granting access to any system,
  evaluate the cybersecurity posture of vendors
  the bank is considering working with.
  Financial institutions need to ensure
  the vendor’s security aligns with their own.

• Constant updating: Maintain a culture of continuously updating systems
  with the latest patches and configurations.

• Employee training: Regularly train staff on cybersecurity best practices,
  phishing awareness
  and social engineering
  tactics to minimize human error.

• Customer education: Educate customers about online security threats
  and motivate them to protect themselves with informative emails.
  Promote secure practices such as using strong passwords
  and enabling MFA and provide them with information
  about phishing emails or phone calls.

Checklist for security assessment

Security leaders can ask themselves and their teams questions
like the following to assess their bank’s cybersecurity posture:

• Are regular risk assessments, vulnerability scanning
  and penetration tests being conducted?
• Are the correct access controls implemented to restrict access
  to sensitive information?
• Is end-to-end encryption ensured for all data, both in transit and at rest?
• Is MFA implemented in all critical systems?
• Are all software and systems continuously updated and patched?
• Does the bank have a robust incident response plan that includes
  communication outlines and post-attack procedures
  in order to address the cyberattack?
• Are employees trained to recognize and report any cyber threat?
• Are the different departments within the bank aware
  of their shared responsibility for cybersecurity?
• Does the board of directors include individuals
  who possess knowledge about cybersecurity?

Risk mitigation in bank application development

Building security into the fabric of bank applications
from the very beginning is fundamental to mitigate cyber risks.
Risks can be identified early on the software development lifecycle (SDLC)
by integrating security factors.
This can include preliminary analysis to understand
the bank’s needs and threat modeling exercises
to identify potential vulnerabilities.

Another way to mitigate risks is to implement coding standards
that prioritize security,
as well as conduct constant code reviews to identify
and fix vulnerabilities early.
Fluid Attacks secure code review solution
provides the combined power of both secure code review
tools and manual code review.
This allows for early and accurate identification of weaknesses
and their prompt remediation.

Other developing mitigation strategies
could include creating plans to mitigate risks,
adopting a secure development model like
OWASP’s risk assessment framework
to provide a structured approach.
Using well-vetted open-source software
and libraries helps prevent extra risks.

Finally,
integrating security testing into the CI/CD pipelines
and failing such pipelines if code flaws
are found can help catch vulnerabilities
and remediate them before they are deployed.
This can save everyone time and money that would
otherwise go to remediation expenses.

Fluid Attacks’ solution for the banking sector

The challenges and threats lurking around banks
are not going to end.
They’re getting more intricate and less easy to catch.
Instead of waiting for attackers to exploit vulnerabilities,
banks can adopt a solution like the one we offer.
Our proactive approach to vulnerability management
has helped banks to continuously improve their security posture
and stay ahead of ever-changing cyber threats.

Our Continuous Hacking
solution is the ideal AppSec choice for banks.
Our comprehensive solution uses not only
automated vulnerability scanning tools like
SAST or SCA,
but also leverages AI as well as our expert hacking team
to identify and exploit vulnerabilities throughout the SDLC.
And as previously mentioned,
the earlier we identify and report a vulnerability,
the more protected your application is.
Speaking of reporting, the visibility our platform provides is extensive.
Managing vulnerabilities becomes easier
as you can learn about the security issue,
its severity and location, prioritize it,
assign it to your team and even get remediation suggestions from our hackers.
Get to know our platform here.

Because we seek to streamline your developers’ workflow,
our platform integrates seamlessly with existing systems,
which enhances the efficiency and scalability
of the vulnerability management process.
With our integration features, you can create issues from GitLab,
Azure DevOps or Jira automatically,
find security issues in your AWS or GCP cloud environments,
and use the VS Code extension to take you to the specific line
of code where the vulnerability was discovered,
leverage gen AI to get fix suggestions, and more.
See what extensions may work for you here.

The journey to a robust cybersecurity posture is ongoing,
repetitive, requires vigilance, adaptability and commitment.
We, at Fluid Attacks,
want to be part of your journey.
Contact us and let us show you what we can do for you.