The 4 Largest Cyber Threat Fears of the Banking Industry

Media Division | July 27, 2016

While every industry, from health care to the film industry has reason to fear a cyber-attack, the banking industry affects every business in America. If you and your company conduct business at a financial institution, pay attention: here are the 4 largest cyber fears of the banking industry.

Fear Number 1: A Global-Scale Attack

The truth is, the banking industry has already been attacked worldwide, in countries such as the Philippines, Bangladesh, and yes, even the United States. The Society for Worldwide Interbank Financial Telecommunication (SWIFT) reported an $81 million hack and acknowledged that similar attacks have been attempted across their network.

For the banking industry the fear is: what if attacks like those at SWIFT are just the beginning of a bevy of future attacks?

Fear Number 2: Security Measures Won’t Matter

Large banks spend billions on cyber security. Forbes recently reported that the combined spending on cyber security, of just a few major banks (J.P. Morgan, Bank of America, Citibank and Wells Fargo) will total an estimated $500 billion in 2016. Banks are working with other institutions to try to stay on the cutting-edge of cyber security, and the bigger banks can afford top-notch professionals.

But smaller banks do business with larger banks, and a chain of security is only as strong as its weakest link. The banking industry fears that a successful attack on a small bank could cross through banking networks and rob or crash the entire system.

Fear Number 3: Insider Attack

While it is easy to paint a picture of some foreign genius orchestrating direct attacks at the global banking industry, the truth is it is much more simple that that. So many trojans, malware, phishing emails and such are released each month, that every business receives multiple threats per day. Then, unintentionally, an employee clicks on the wrong link, replies to the wrong email, or otherwise releases an internal attack on a business’ network, and the threat becomes a reality.

For the banking industry educating every single employee, patching every bit of software, and so on, is just beyond realistic ability. Banks know this weakness, and while they work to keep up with cyber-attacks, they fear an eminent insider liability.

Fear Number 4: Losing Customer Confidence

The financial industry has had a PR problem, especially since the market crash of 2008. A recent survey of consumers reported that the financial services are “the world’s least-trusted industry.” Young people, in particular, are making more money but distrusting banks.

The Financial institution fears that distrust of the industry will lead to a failure to invest. Without all of that money “sitting there” in the global market, without the billions of credit card debt, property loans, stock, etc., banks have nothing to trade. After all, they are still technically a service industry and not a commodity. A growing number of alternatives to traditional banks are popping up, and while many such solutions still depend upon the established financial industry, newer options like bitcoin seek to operate outside of the system.

While technically not a cyber-security threat in itself, a loss of customer confidence would devastate the industry. Banks have had a long-standing policy of not publicizing a robbery. The FBI shows up in unmarked cars, the branch is quietly closed and so on. However, a cyber-attack like the one at Target (during peak holiday season, no less) has a greater financial cost: the loss of consumer confidence.

If word of cyber-attacks on the financial institute spread, it could cost the industry billions.

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