https://www.fintechfutures.com/wp-content/themes/fintech_child/assets/images/logo/fintech-logo.png
  • Home
  • COVID-19
  • News
  • Intelligence
    • Back
    • Analysis
    • Interviews
    • Features
    • White Papers
    • Case Studies
    • Surveys, Reports & Infographics
    • Webinars
    • Podcasts
    • Videos
    • Library
    • Techwire
    • Browse
  • Publications
    • Back
    • Banking Technology Magazine
    • Supplements
    • Daily News at Sibos
    • Subscribe to Magazine
  • Content Hub
    • Back
    • COVID-19: industry impact & response
    • Challenger Banks Guide
    • Food For Thought
    • I’m Just Saying
    • Through a Gen Z Lens
    • Ask The Expert
  • Videos
  • WTF? Podcast
  • Awards
    • Back
    • Banking Technology Awards
    • PayTech Awards
  • Advertise
  • Jobs
  • More
    • Back
    • About us
    • Contact us
    • Advertising / Media Kit
    • Banking Technology Magazine Calendar
    • Reports Calendar
    • FinTech Futures Newsletter
    • Events
  • FinTech
  • BankingTech
  • PayTech
  • RegTech
  • WealthTech
  • LendTech
  • InsurTech
Banking Technology
  • NEWSLETTER
  • Home
  • COVID-19
  • News
  • Intelligence
    • Back
    • Analysis
    • Interviews
    • Features
    • White Papers
    • Case Studies
    • Surveys, Reports & Infographics
    • Webinars
    • Podcasts
    • Videos
    • Library
    • Techwire
    • Browse
  • Publications
    • Back
    • Banking Technology Magazine
    • Supplements
    • Daily News at Sibos
    • Subscribe to Magazine
  • Content Hub
    • Back
    • COVID-19: industry impact & response
    • Challenger Banks Guide
    • Food For Thought
    • I’m Just Saying
    • Through a Gen Z Lens
    • Ask The Expert
  • Videos
  • WTF? Podcast
  • Awards
    • Back
    • Banking Technology Awards
    • PayTech Awards
  • Advertise
  • Jobs
  • More
    • Back
    • About us
    • Contact us
    • Advertising / Media Kit
    • Banking Technology Magazine Calendar
    • Reports Calendar
    • FinTech Futures Newsletter
    • Events
  • newsletter
  • FinTech
  • BankingTech
  • PayTech
  • RegTech
  • WealthTech
  • LendTech
  • InsurTech

bankingtech.com

bankingtech.com


‘Pernicious disease’ of cyber war escalates

  • Written by FinTech Futures
  • 1st October 2014

While the average bank heist averages $6000, a cyber-thief can make off with millions. Last year 552 million identities were breached, while every call about a compromised credit card costs a bank $4.

Are we fighting a cyber war? The war analogy seems to aptly describe the relentless attacks aimed at breaching financial institutions’ security, but an IBM security expert on yesterday’s cyber war panel sees cyber attacks as being more like a pernicious disease, writes Dick Pirozzolo..

Kris Lovejoy, general manager of IBM’s security services division, explained that when individuals take security precautions, it markedly reduces breaches. This is much like the way hand-washing reduces the number of classes schoolchildren miss. She added: “We have to think of it as a biological system; how do we detect the difference between ebola virus and the common cold? How do we protect ourselves? Most folks we work with have, at some time, been personally compromised,” and, “90 per cent of the time the bad guy got in because he exploited an individual who double-clicked on the wrong thing.”

War or disease, the major threats fall largely into a few categories: criminal activity – particularly organised crime cartels in Eastern Europe looking to steal money – terrorist groups, or nation states bent on disrupting banking or making off with intellectual property such as algorithms, and young activists on a mission to disrupt commercial activity as form of protest. Any of these categories includes insiders working with outsiders.

With banks operating globally, attacks can come from nations seeking a way into international transactions. In all likelihood, North Korea monitors transactions between other nations and South Korea, while Russia pokes into transactions involving Ukraine.

Beyond banks, the risk extends to essential infrastructure such as telecommunication, utility companies and the power grid. Governments play a key role in providing intelligence that is critically needed by banks to defend themselves against cyber attacks.

While Citi’s Charles Blauner, global head of information security and chair of the Financial Services Sector Coordinating Council, sees the vast number of security breaches not as skirmishes but as a war, he does not believe victory is possible. “Winning the war is not possible, the victory is in how you respond and monitor that risk,” he said.

Few of the delegates attending the session believe cyber attacks are avoidable. When moderator Ben Rooney, co-editor in chief of Informal and a former Wall Street Journal financial reporter, asked the group to respond to a survey question: ‘how likely is it that your institution will be a victim of a cyber crime in the next year?’; 44 per cent voted ‘very likely’ and 26 per cent ‘likely’ for a total of 80 per cent of the audience feeling their institution could be attacked in the near future.

The sense of victimisation extends to customers as well and, while one cannot put a return on investment number to investment in cyber crime countermeasures, the harm a security breach does to a company brand is incalculable. Likewise, the impact on customer relations is impossible to measure. Of course, the breach of the customer list of a Swiss bank is in a category unto itself, but other breaches are no less worrisome.

The Home Depot and Target breaches in the US caused a level of stress on the consumer that extended far beyond the cost of having to reissue new credit cards. In The Home Depot case, company officials did not even know of the breach until they were alerted by law enforcement officers. If consumers become wary of purchases with these retailers, it can be a further blow to profits.

With banks moving customers to online banking, how much responsibility does the customer have when it comes to cyber security? At least 57 per cent of the audience polled felt some of the financial burden could be placed on the customer, though the panellists agreed that this is unlikely to occur.

While the consumer is protected, the same cannot be said for business customers, according to Lovejoy, who pointed out that there are some grey areas such as when a retail customer uses a company computer to make a transaction.

Banking is also moving increasingly to mobile devices, which may add an unprecedented level of security in the war against cyber atttacks. Blauner observed that banking using mobile devices eliminated the vulnerabilities associated with passwords. “I’m big on mobile banking,” he said. “Ten years ago when we talked about biometrics, we would have had to send a video camera to every customer. I have a phone; it has a lens for facial recognition, a mic for voice recognition and the iPhone can record a thumbprint. A breach is a lot harder with this device and it is hard for the criminal to scale. Bringing biometrics into the mass market is a huge game changer.”

But Lovejoy pointed out that when apps are developed, vulnerabilities could be built into the code. Security needs to be part of the development process.

She also pointed out that cyber attacks should be part of the disclosure public organisations undergo.

Winning the cyber war may not be nearly as important as how an organisation responds. Lovejoy pointed out that all public organisations must have disclosure committees under Section 409 of the Sarbanes-Oxley Act and security breaches should be evaluated by these committees.

James Kaplin, principal at McKinsey, added: “How you respond extends beyond technical remediation. How you communicate with customers, law enforcement, the media and the call centre, matter.”

While news reporters may be drawn to cover a security breach, Blauner emphasised that handled properly, the cyber attacks are news for one day, “handle it badly and they will be in the press for weeks”.

Tags: Cybersecurity, Financial Crime & Fraud BankingTech, PayTech

Leave a comment Cancel reply

-or-

Log in with your FinTech Futures account

Alternatively, post a comment by completing the form below:

Your email address will not be published. Required fields are marked *

Related


  • Video: Top fintech stories this week - 15 January 2021
    FinTech Futures' weekly news round-up.
  • Italy’s BNL goes live on Tink open banking service
    The implementation is part of an extended deal with BNP Paribas.
  • Pakistan launches new instant payment system Raast
    Government hopes Raast can host a collection of payment types.
  • The Cambridge Building Society migrates to Azure cloud with DPR
    DPR provides its mortgages and savings platform on the cloud for the society.
  • Digital lender Blend raises $300m in Series G funding round
    Lending firm plans to expand team and grow its products with the substantial raise.
  • Dubai-based Bankiom promises “new way” to manage money
    Banking app promises fast account setup and loan processing.
  • Irish banks plan payments rival to take on fintech entrants
    AIB, Bank of Ireland, TSB, and KBC pull together to battle fintechs like Revolut.
  • DXC sells Fixnetix trading system to Options Technology
    Options looks to expand its product suite.

Related Content

  • FLEX moves 13 US credit unions to its core tech in 2020
  • UK payments acquirer Unlimint powers on with “aggressive” LatAm expansion
  • IHS Markit acquires compliance firm Cappitech after year-long partnership
  • Stripe cuts off Trump campaign for inciting violence

Magazine

Banking Technology December/January issue out now

16th December 2020

Banking Technology November issue out now

  • 1
13th November 2020
view all

Reports & Surveys

Omdia Universe 2020-21: Temenos recognised as a leader for digital banking platforms

15th December 2020

Report: Digital KYB – a springboard to customer onboarding success

30th November 2020

Report: Three key strategies for customer experience success

15th November 2020
view all

Content Hubs

COVID-19: industry impact & response

26th June 2020

The rise of challenger banks around the world

26th June 2020

CRUX RegTech Digital Day – 28 July 2020

26th June 2020
view all

Podcast

What the Fintech? Episode 18 | Year in review

18th December 2020

What the Fintech? Episode 17 | The spirit is willing, but the markets are weak

1st December 2020

What the Fintech? Episode 16 | Financial inclusion 2020

16th November 2020
view all

Videos

Video: Top fintech stories this week – 15 January 2021

15th January 2021

Video: Top fintech stories this week – 08 January 2021

8th January 2021

Video: Top fintech stories this week – 11 December 2020

13th December 2020
view all

White Papers

Embedded insurance: a $3tn market opportunity, that could also help close the protection gap

4th January 2021

White paper: The business value of ServiceNow for retail banks

12th December 2020

E-book: Migration to cloud – your guide to delivering an intuitive customer experience

8th December 2020
view all

Techwire

TestingXperts Opens Asia Pacific, Middle East, and Africa Headquarters in Singapore

19th January 2021

THB places the first risk with Global Health Risk Facility through Syndicate 1796

18th January 2021

Reply Signs an Agreement with AWS to Develop Industry Solutions

18th January 2021

Defiance Cross-Lists the First Ever 5G ETF (FIVG) and SPAC ETF (SPAK) in Mexico

15th January 2021

Socure to Power Responsible Growth for Online Gaming Operators in Eleven U.S. States with Intelligent KYC

15th January 2021

SWBC Selects Finicity Pay™ for Account Validation

15th January 2021

Latinia invests in fintech company Ábaco to boost financial inclusion in the region

15th January 2021

TPG Growth and The Rise Fund Make Major Investment in Greenhouse Software

14th January 2021
view all

Twitter

FinTech_Futures

Lessons from The Boring Company "The reason I’m not excited is that finance is a necessity rather than a luxury."… twitter.com/i/web/status/1…

19th January 2021
FinTech_Futures

Jamie Waller’s fintech ‘Just’ lands court backing to undercut bailiff industry, bringing virtual, fee-free alternat… twitter.com/i/web/status/1…

19th January 2021
FinTech_Futures

Goldman picks @Marqeta to power @Marcus_uk current account rollout fintechfutures.com/2021/01/goldma…

19th January 2021
FinTech_Futures

.@antgroup sets up working group to overcome last minute regulatory requirements which ceased the launch of its wou… twitter.com/i/web/status/1…

19th January 2021
FinTech_Futures

.@TideBusiness gears up for Indian international expansion, Laurence Krieger steps into UK CEO role fintechfutures.com/2021/01/tide-g…

19th January 2021
FinTech_Futures

.@Adq_Official's unnamed neobank nabs new CEO from Emirates NBD fintechfutures.com/2021/01/adqs-u…

19th January 2021
FinTech_Futures

.@Konsentus acquires Open Banking Europe initiative from #EBA Clearing subsidiary fintechfutures.com/2021/01/konsen…

19th January 2021
FinTech_Futures

.@CapitalOne's “willful” AML failures, which included processing millions for an American Mafia affiliate, land the… twitter.com/i/web/status/1…

19th January 2021

Report: Digital Know Your Business (KYB)

Free download

Report: Three key strategies for CX success

Free download

Omdia Universe: selecting a digital banking platform

Free download

FinTech Futures Jobs

Find a job or post a vacancy

Fintech Futures
  • About us
  • Advertise with us
  • Contact us
  • Fintech jobs
  • Privacy
  • CCPA: “Do Not Sell My Data”
  • Cookies Policy
  • Terms
Copyright © 2021 Informa PLC. Informa PLC is registered in England and Wales with company number 8860726 whose registered and Head office is 5 Howick Place, London, SW1P 1WG.
This website uses cookies, including third party ones, to allow for analysis of how people use our website in order to improve your experience and our services. By continuing to use our website, you agree to the use of such cookies. Click here for more information on our Cookie Policy and Privacy Policy.
X