The banking sector is changing because of new digital ideas. This brings new problems with keeping things safe. Recently, reports have shown that bad computer things can cause trouble in the financial world. So, it’s really important to manage the risks and make sure computer networks are safe. Bad people who want to steal money online are working hard to do it. This makes it more likely that computer information will be stolen, and it’s getting harder to stop them.

Rules made by governments and important banks, like EU DORA and G7, are telling banks to be extra safe online. These rules are made because of past problems and to stop future ones. The online world is changing a lot, with more things becoming digital and depending on other companies. There are also problems between countries that make online safety even harder. Banks need to be ready to protect themselves.

Central Bank Digital Currencies (CBDCs) make things even more complicated. They can help more people use banking, but they also make it easier for bad people to steal money online.

In this competitive world, where regular banks, new online banks, and tech companies all want to be successful, having a smooth online experience is very important. But, it’s also important to remember that there are dangers online. Using new technology is good, but it has to be safe from new problems.

Increasing Cyber Risks for Banks

Increasing cyber risks for banks

As banks and financial services providers continue to grow and innovate, a holistic approach to cybersecurity informed by the latest regulatory insights and threat intelligence will be crucial to ensure sustainable and secure progress. 

Cybersecurity in Banking 

In the fast-changing world of digital banking, the people who protect against computer bad guys are facing a tough battle. Banks and money stuff are easy targets for computer attacks that can lead to big data leaks. These attacks are usually done to make money, steal secrets, or cause trouble for political reasons. These crimes are a big worry all over the world, as a new report from INTERPOL tells us.

When an attack happens, it can hurt a bank’s reputation, depending on how bad it is. According to a group called the European Union Agency for Cybersecurity, a lot of data gets stolen every month, and many organizations have to pay money to get their data back. Another report says that in 2022, there were more problems with hacking digital money than ever before.

As banking gets more digital and the risks go up, the big bosses need to make sure their business can keep running, follow the rules, and have good computer security to protect against all sorts of attacks.

Companies in the money business need to defend themselves against things like data leaks, ransom demands, nasty computer programs, fake emails, and tricky tricks that bad people are getting better at. It’s getting harder because the ways they attack are becoming more complicated. A 2023 report from a company called Moody’s says that the people who make rules and the companies that give out insurance are trying to reduce the money they might lose from computer attacks, but there will be more people who want insurance than there are companies offering it.

The Value of Cybersecurity for the Banking Sector

Value of cybersecurity for the banking sector

To stay strong and competitive in this ever-changing environment, banks and financial companies need to keep coming up with new ideas and make sure those ideas are safe. This is a tough job because there are more and more ways for bad people to attack, especially with digital banking, new financial technology companies, and the introduction of digital currencies. Here are some important things for cybersecurity in banking:

  1. Visibility: It’s really important to see what’s happening on computer networks because more people are using mobile banking, connecting things like smart devices, and using cloud services. With more complicated online threats, you need to keep a close eye on everything happening on your network to stop data leaks and manage risks.
  2. Automation and Efficiency: Old-fashioned security systems that work separately are becoming less useful. Modern cybersecurity needs systems that can do things automatically, reducing the need for people to do everything by hand. Using something called “policy as code” can help make this process even smoother, making sure security rules are always followed on a secure network.
  3. Flexibility: Banks use different kinds of technology that can be in different places, like in the cloud or in their own offices. So, the security rules they use must be flexible and able to change along with the technology. The “policy as code” practice can help with this too, making sure the rules match the technology changes.
  4. Compliance Reporting: Banks need to follow rules set by governments and other organizations to stay safe online. But it’s not just about checking boxes to say you’re following the rules. With the emphasis on cyber safety in these rules, banks need to both follow the rules and be ready to stop online threats. Using “policy as code” can help make sure you’re following the rules automatically.

And don’t forget about the people who work in banks. They need to know how to use new technology and systems. It’s not easy to find experts in these areas, and sometimes there’s a gap in understanding how these systems work.

That’s why Fortinet, a company that works in cybersecurity, is doing a big training program to teach one million people about cybersecurity by 2026. They’re making it easier for security professionals, students, women, and veterans to get this training. They’re also working with many academic partners and organizations to help more people learn about cybersecurity.

As the banking world keeps going digital, being good at cybersecurity means using a smart, well-informed, and flexible approach. It involves bringing together technology and security, teaching people new skills, and using automation. These are the keys to success in this digital journey. Staying safe online is a big part of it.

Cybersecurity Regulatory Impacts

Banks have two big challenges right now: making sure their computer systems are safe and following the changing rules. They need to keep their customers happy while also protecting everyone’s private information and the economy. But, following these new rules and using more digital technology costs a lot of money for both regular and business banks.

It’s really important to keep everything safe in banking because they deal with people’s personal information and make sure transactions go smoothly. But, a recent survey by the International Monetary Fund (IMF) found some problems with how rules are being followed:

  • 56% of banks and rule enforcers don’t have a clear plan to keep banks safe from cyber attacks.
  • 42% don’t have special rules for computer security or tech risks, and a big 68% don’t have a team that’s only focused on risk in their department.
  • 64% haven’t made sure that banks are testing their computer security.
  • 54% don’t have a way for banks to report problems with their computer systems.
  • 48% don’t have rules that specifically deal with computer crimes.

Even though these numbers might look bad, we should see rules and security not as problems but as ways to come up with new ideas and manage risks. For example, a company called McKinsey says that using data analysis in banking can save big banks up to $1 billion every year. This is because they can avoid fines, report their compliance more accurately, and manage their private information and other risks better.

As banking becomes more digital, finding the right balance between new ideas, computer security, and following the rules will be really important. Doing all three can bring amazing opportunities and make sure the financial world is safe, follows the rules, and looks ahead to the future.

For banks, managing risks from online threats is not just about using technical tools. It’s about looking at the whole organization and thinking about all the risks. But, many banks don’t have the right tools to figure out the risks, especially when they work with new digital partners and technologies.

New rules say that banks need to be really good at keeping things going and have a plan for risks that’s the same all around the world. They want to make sure everyone is doing the same thing, so there’s less confusion. They are also looking at companies that help banks and checking if they are safe. Banks are careful when picking who to work with, but there are also new startups that can help. However, banks need to be careful and do their homework to make sure they don’t bring new problems when they work with these startups.

As banking becomes more digital, they need to make sure they have a plan for risks that looks at the rules and how they work with others. This is really important for the future of banking.

Banking Cybersecurity Challenges 

In the past, banks worked in separate sections with different goals and used different computer systems. This made things complicated and often made customers unhappy. Traditional banks, especially, had a reputation for making things difficult, especially when people wanted new services or help. To fix this, banks can use a single system that puts all the information together and connects different computer systems. This can help solve many problems caused by these separate sections. However, when information is kept in separate sections, it can also make it easier for bad people to steal data, break into computer systems, and not follow the rules. These are big problems in today’s banking world.

The computer systems and the huge amount of data they use are really important in the digital age of banking. Banks need to deal with old systems and add new technology to them. To solve these problems, banks should create special teams or groups of experts to come up with new ideas and make sure their services are still good. These teams should have clear responsibilities for their projects.

In the past, keeping computer systems safe in banking was simple. But today, banks use thousands or even hundreds of thousands of connected devices like computers and things that connect to the internet. When you add social media, the cloud, and mobile devices, the chances of data leaks and computer risks go up a lot. The big question is how banks can keep their computer systems safe when they are so complicated.