Financial institutions have been present since the development of money. People needed someone to take care of their financial needs, and banks stepped up. The industry kept growing, offering more and more services as it developed. From depositing the money and keeping it safe to giving out loans, it was always an essential part of our lives.
But, it has also brought some online dangers to our lives. Cybercriminals are trying to make a quick profit from online banks, putting all their customers in danger. Luckily, a safe transaction monitoring and a proper cybersecurity strategy can put an end to these threats.
Development of the finance world
What would we do if there were no financial institutions? Can you imagine storing all your savings underneath your mattress or even having to trade for goods? Or having to wait to buy a house until you have the exact amount available? In the past, people had to live like that.
Then, the banking industry developed, and brick-and-mortar financial institutions started popping up, offering people the opportunity to have their financial tasks tended by professionals. While that was a significant improvement compared to the previous state of finances, it still left much to be desired. Going to an actual brick-and-mortar institution was the only way to gain access to your money.
The most simple tasks like checking the account balance or the status of your savings account required you to go to the physical bank. Even requesting the loan was completely different when dealing with traditional brick-and-mortar banks than with online banks.
Thankfully, with the development of the internet and technology, the situation has changed. Now, even newborns are getting accounts opened in their name, and loving family members start the saving process. You can use your computer or phone to check your account balance, transfer funds, pay bills, or even apply for a loan. Online banking has become so widespread today that there is hardly anyone not using its benefits.
According to Statista, there were 2 billion individuals worldwide using online banking services in 2021, and it is predicted this number will reach 2.5 billion by 2024. While most banks offer online banking services, there are also banks that exist only online that are starting new trends in the banking industry. In the future, we might see a day where there are no more brick-and-mortar banks at all.
Challenges banks face in the modern world
The advances in the finance sectors completely changed our world. And it is all due to the development of technology and the internet. But, along with all the gains, the financial sector has experienced some challenges. But, either in the past or modern times, its most significant challenge still remains the same: the fraudsters and criminals trying to exploit them for profit.
Their attacks keep getting more sophisticated as they also use the newest development in technology, such as artificial intelligence, to conduct their attacks. Due to the nature of the business and the fact they have access to the money and also the users’ confidential data, the financial sector is in even more danger than the other sectors.
Cybersecurity is no longer an option, as any company that wants to continue to run its business without becoming a victim of an online attack needs to start protecting itself. Regardless if it is a virus, denial-of-service (DDoS) attacks or ransomware, financial institutions need to be ready to deal with them.
How can banks protect themselves and their customers?
Luckily, the security area wasn’t waiting idly while the cybercriminals were developing their attacks. It has also undergone numerous changes and development to ensure it can protect us from fraudsters and cybercriminals and their evolving schemes. They have gone a long way from ensuring the bank’s safety with just antivirus programs or even just the guard in the brick-and-mortar bank.
Unfortunately, while they still fulfill their purpose, those methods are no longer sufficient. If the banks want to keep up with the threats, they need to step up their game and ensure they are providing an efficient cybersecurity strategy.
1. Conduct regular security audits.
Their cybersecurity strategy always needs to be at the maximum level, so it is essential to conduct regular security audits. They are instrumental in detecting any security vulnerabilities giving you an opportunity to fix them before they can be exploited.
2. Transaction monitoring.
This allows banks to monitor all customers’ transactions in real-time, ensuring they are legitimate transactions. It checks all of the details connected with the transaction and assigns them a risk factor which is then used to determine a course of action. It can be used to identify large cash deposits or withdrawals, use a customer’s transaction history to detect any unusual account activity, or even recognize transactions over a specific value. While these actions could be perfectly legal, they could also indicate fraudulent action, and transaction monitoring can help determine the risk.
3. Educate employees and customers.
To ensure a cybersecurity strategy is effective, it needs to result from a joint effort. Banks can take all the necessary steps, but if their customers or employees are not mindful of their actions, everything will be in vain. Educate your customers about online safety and how to protect themselves when using your services, such as introducing good password hygiene or utilizing multi-factor authentication. At the same time, your employees need to know how to recognize online dangers and how to protect themselves and your business against it.
4. Keep yourself up to date with the newest cybersecurity trends.
The area of cybersecurity is constantly adapting to stay ahead of cyber dangers. You should stay up to date with the newest cybersecurity trends to ensure your cybersecurity strategy provides you with the best protection.
Cybercriminals will never stop trying to get the upper hand, but that doesn’t mean we have to accept it. By utilizing a proper cybersecurity strategy, you can ensure that never happens.