Demystifying Global Cybersecurity Threats in Financial Services

Introduction

The finance sector is complexly intertwined into the daily lives of individuals and across the globe and is the core of the world economy. These entities empower people and organizations to manage their trade, finances, and operate in various manners globally. To empower financial inclusion and enhance people’s lives, financial companies are shifting their operations to digital platforms which exhibits huge potential for both sides. Since transactions in financial sector are sizable in both value and volume, it is a potential target for cyber threats from criminals, as gains from any such cyber-attack is apparently infinite. With such huge financial benefits and paybacks involved, coupled with low risk and detectability, the new age highly proficient cyber-devils are endeavoring to knock down the protective shields of ill-protected Banking, Financial Services, and Insurance (BFSI) sector. Thus, cybercrimes are emerging as a key concern in the global financial market, snowballing into a major threat. This fact is taken cognizance by the entire financial sector worldwide and many establishments have already accepted the fact that finance industry is the most attacked sector in Europe, Middle East and African regions.

In recent years, financial markets across the world have been affected by a quick rise in the number of cyber-attacks and incidents where data has been compromised (data breach) – and typically affected markets are characterized with higher volumes of digital financial transactions. Chebyshev (2019) in his study found mobile malware more prevalent in the developing world. Study by McAfee (2018) concluded that while Russia and most countries in Central Asia have the maximum reported cases of mobile malware, Asia has held the record for the maximum usage of mobile banking and digital payment applications and the continent is also witnessing increasing number of cyber-attacks on financial establishments. Just to name a few countries, Japan, Indonesia, Bangladesh, Philippines, Vietnam, and Taiwan have faced a series of cyber-attacks. This threat applies not only to banks, but also to asset management companies, exchanges, insurance companies, technology providers, clearing and settlement houses, and to supply chains institutions as well.

Figure 1.

AIG Systemic Cyber Risk Study: Industries Most Likely to Face a Systemic Attack 2017 (Graphic: Business Wire)

The financial sector across the world is troubled with the continuous waves of cyber assaults where exceptional instigators quietly conduct hi-tech data breaches, invasions, heists, and data thefts, etc. Consequently, there is huge financial loss every year. Cybersecurity Ventures has projected that due to cyber-crimes the world will face a loss of $6 trillion annually by 2021. Topics such as increasing cost, frequency, and magnitude of data breach are dominating the discussions on risk management as data compromise has shaken, hindered, and even paralyzed markets (temporarily). According to experts, confidential records and sensitive data worth billions of dollars have been compromised. As developed countries have made their defense stronger against cyber-crimes, the cyber attackers seem to have to shift their focus to new and evolving digital financial markets. Using insecure devices or ill-protected transmission lines may be the reason for digital transactions becoming more vulnerable in this part of the world.

Cyberthreat has become more alluring since the Covid-19 pandemic started. As new rules and regulations were imposed by the governments, employees and workers are being encouraged to work from home. This has brought new challenges as the system now is highly dependent on technology infrastructure, inviting many cyber threats to the new operating model. The dangers in the form of phishing or privacy invasion have become a significant hurdle for the companies resulting in exploitation of personal and company's information deterioration. Salaam et.al (2019) explored the cybersecurity risks to things, sensors, and monitoring systems and identified the implications to be distinct from the conventional networking systems in many aspects.