Financial Cyber Crime Having the Widest Coverage Among All Industries
Cyber threats and attacks may differ in their purpose, method and impact; however, the most common ones are malware, hacking, phishing, data extortion and distributed denial of service (DDoS). The attackers’ ultimate aim is to getting access to personal information, user account details, confidential transactional data and finally to take possession or control of the transactional systems for the purpose of stealing money or creating operational disturbance.
Unfortunately, the frequency and variety of cyber-crimes are in increase across all the sectors in the world together with the growing digitalization trend. Among those, financial industry is the most severely affected one having cyber security cases 300 times more than other industries (Boston Consulting Group) as it is under continuous attack of the hackers. In a similar manner, the highest cost for cybercrime belongs to the financial industry with $18.3 million on average (Cybersecurity Statistics).
Financial cyber-crime is the activity of achieving financial profit via criminal activity which includes identity fraud, internet or email fraud, ransomware attacks, ATM skimming, stealing credit card or other payment card information and gaining access to financial accounts for the purpose of operating unauthorized transactions, data extortion, stealing funds or apply for financial products.
Targets of the Cyber Attackers
The target of the financial cyber-crime can be financial institutions, companies or individuals. In terms of FIs and companies, the options for prevention and actions are more prevalent in comparison to individuals facing cybercrime. However, the consequences of a successful cyber attack on the FIs and companies can be enormous and devastating. In addition to the lost amount of sums which may affect the financial stability of the whole company negatively and even lead to bankruptcy, the detrimental effect on the reputational side in the eyes of business partners, customers and society may leave irredeemable damage as well.
As for the individuals who are the victims of cyber crimes, having their accounts stolen, savings emptied or IDs stolen and debts taken by their names, there is a bigger gap in the system in acknowledging, taking it serious and acting upon the cyber crime. Basically everyone can be the target of the cyber attackers, but in most cases, they detect senior or older individuals who have the higher probability of lacking the ability or proficiency in using technology effectively or who are digitally incapable. Experiencing the negative side of technology like this may create fear and insecurity among people towards the financial institutions and governments unless necessary precautions and more importantly actions are taken. The current financial and security systems fail in serving the victims of cyber crime who encounter difficulties in reporting the incidents or receiving solid support, therefore a reform in the system is as urgent as it is necessary.
Effective Methods to Combat Cybercrime in Financial Industry
The annual cost of cybercrime and fraud is estimated as more than $3 trillion globally. However, the focus of monitoring systems operated by the financial institutions is to remain compliant with the regulations at the minimum level and the issue of identification of suspicious financial activity with maximum efficiency remains neglected. In order for the FIs to achieve both at the same time, they need to define effective and analytical goals first and then reinforce their monitoring systems accordingly with advanced analytical technologies and tools such as machine learning (ML), artificial intelligence (AI) or behavioral biometrics.
Reducing the false positives must be one of the goals as they are one of the most time and effort taking issues for the financial institutions and therefore an important handicap for sparing more energy and time for detecting and combatting actual threats and attacks. Increasing the efficiency with faster identification of suspicious activity can be set as the second goal. The use of technologies such as machine learning and behavioral biometrics can use basic user data to rapidly detect abnormal activities and alert the monitoring teams. Another goal to combat financial cybercrime can be expansion of security coverage. The connectivity of technological landscape has enlarged the areas that the threats may reach. It has become crucial for FIs to ensure that they cover all the possible areas which are prone to the cyber attacks. Finally, financial institutions are entitled to develop their prediction and prevention tools.
To be able to actualize the above mentioned goals, the most effective solution for the financial institutions is to form partnerships for legal and technological support. Getting use of AI and predictive analytics can improve the data organization so that financial institutions can merge and analyze data more easily against cyber crimes. There are specific data monitoring and analyzing methods that are helpful for the FIs in ensuring security and prevention against suspicious activities which are:
- Digital entity fingerprinting: a set of validation tests to understand if the device used, access location or IP address is suspicious.
- Session monitoring: analysis of user behavior to detect if there is a real person or a bot activity in the session.
- Behavioral biometrics analysis: checking if the typing speed, movement of the cursor or reaction intervals are in line with regular behavior of the user.
The threats cyber crimes pose today is definitely more serious than previous years and they keep evolving at a fast pace. Criminals constantly come up with new methods to breach and attack therefore, in order to fight them effectively, financial institutions and security authorities must keep abreast of the latest technological and digital trends and apply them successfully. We used to depend on the firewalls and antivirus systems for the prevention of cyber attacks; however, these are not sufficient for protection anymore. The modern-day cyber threats can only be taken under control with a multi-layered, all-inclusive defense system which prioritizes the protection of data – prevention of data loss, data profiling and data collection. With this preventative, cyber defense approach, the cyber attacks can be detected and dismissed prior to the action.