Data Breaches in the Financial Sector
Humans benefit from technology every day. For example, a person no longer needs to visit the bank to deposit a check. They can remain in the comfort of their own home, snap a picture of the check, and have the funds in their accounts within a matter of hours or days. Checking their balance requires nothing more than a few clicks on their mobile device, and sending paperwork for a loan takes little time and effort thanks to electronic solutions offered today.
However, cybercriminals also benefit from this technology. They recognize the opportunities available to them and take advantage of weaknesses within the financial sector. Data breach statistics show how successful they are at capitalizing on any weakness, and financial institutions must continuously improve their security measures to prevent these breaches.
Service provider mFax feels consumers need to be informed when it comes to their financial security. When a consumer knows where common weaknesses lie, it becomes easier to determine which companies to partner with when it comes to their financial needs. What must every person know to protect their personal finances?
In the past, consumers would contact their card issuer when they believed financial information was stolen at a local store, restaurant, or another establishment. That is no longer the case. Today, 20 percent of investigations involving a payment card in 2020 are for point-of-sale transactions. In 2014, that figure was 80 percent. That’s a drastic turnaround in a short period of time.
America serves as the world’s leader when it comes to powerful economies, which helps to explain why it remains the focus of cybercriminals the world over. However, many people are surprised to learn that 97 percent of stolen records are from the United States. In addition, almost 60 percent of data breaches occur in the U.S. Cybercriminals want the best return on investment and know that the United States is where they will see this return.
The U.S. isn’t alone, however. Cybersecurity global spending continues to rise. In 2015, companies across the globe invested $1 trillion in an effort to fight off these attacks. In 2021, this figure it expected to be more than $6 trillion. This increase of approximately $1 trillion every year doesn’t appear to be slowing either.
Money serves as the motivation for almost three-quarters of all data breaches, as reported by Verizon. Organized crime groups account for 39 percent of these breaches, and more than half of the breaches went undetected for months. Sadly, consumers may find their financial situation is drastically harmed in the time it takes for the breach to be uncovered. Although financial institutions are held responsible for any breaches that affect their organizations, it often falls on the consumer to handle the cleanup.
The High Cost for Financial Institutions
The financial industry continues to spend significant amounts of money to boost security, as the number of cyberattacks has skyrocketed in recent years. The banking industry remains one of the hardest hits when it comes to data breaches, as experts believe each company spends an average of $18.3 million annually to prevent these attacks and recover when one does happen. The financial losses serve as only part of the equation. The loss of user trust also has a major impact on the organizations.
Experts state the average cost of a data breach hovers around $4 million globally. Nevertheless, some countries take bigger hits than others. Financial institutions in the U.S., for example, can expect to pay out over $8 million on average for each data breach within their organization.
Banks Aren’t Alone
Cybercriminals targeted banks 47 percent of the time in 2017. However, they continue to expand and look for new opportunities, with cryptocurrency projects increasing in favor with these criminals. In fact, 21 percent of cyberattacks in 2017 focused on crypto-related businesses. Loan companies accounted for 11 percent of tasks, knocking them down to third place.
ATMs Aren’t Safe
Individuals benefit greatly from ATMs, as they have access to cash almost anywhere, they go today. People have known for years to safeguard their pin when using one of these machines, but what is the financial institution doing to protect their information?
Positive Technologies reports ATMs remain vulnerable to cyberattacks. Sadly, 85 percent of these machines today aren’t properly safeguarded against network attacks. Cybercriminals may spoof the processing center or do numerous other things to secure customer data. The vulnerability extends beyond spoofing attacks, as 69 percent of ATMs tested remained vulnerable to a black-box attack, with another 76 percent lacking the security needed to prevent access to the ATM’s operating system.
More Work to Be Done
Consumers put their money into financial institutions believing it will be safe. Making this assumption could cost them, as 65 percent of major banks in America failed web security testing a few short years ago. Actually, larger banks in the United States were found to be lacking secure websites. Only 27 percent of the top 100 banks in the country were found to be safe from breaches during this testing, which was a significant drop from the prior year.
Almost 333 million people live in the U.S. today. In 2019, the country saw 1,473 cyber-attacks, and these attacks led to 164.6 million records being stolen. While many people had their records stolen on more than one occasion that year, it goes to show that no person is immune to having their data captured by criminals. Fortunately, these measures appear to be working. In 2018, 472 million records were stolen, so 2019 witnessed a significant drop.
An Unfulfilled Need
Companies everywhere know how hard it is to find workers today. The cybersecurity industry continues to struggle to find people qualified to take on positions within this sector. In 2015, cybersecurity companies advertised approximately 209,000 jobs in the sector, and that number is only going to rise. What does this mean for the average consumer or small business owner looking to protect their financial data?
Men and women cannot be too careful when it comes to safeguarding their money. However, financial institutions must do everything in their power to keep consumer data safe and secure. Doing so continues to be a challenge, and individuals and companies must know who they are partnering with and what measures are being taken to protect customer information. This responsibility cannot fall to just one person or organization, as too much is at risk.