INTRODUCTION:

The world's leading financial institutions each have their own security teams to cope with any potential cyber threats. These teams are accountable for ensuring the continued safety of the systems that are used by the banks and for defending the customers of the banks against any cyberattacks that may be launched against them. These teams collaborate with cybersecurity firms and cybersecurity specialists in order to protect their networks from being exploited by hackers.

There is a concerted effort being made by financial institutions to reduce the likelihood of cyberattacks. Because of this, they now employ security specialists who are knowledgeable about how attacks occur and the methods by which they may be prevented. Professionals in the field of cybersecurity use strategies to reduce risks, educate users on how to protect themselves from cyberattacks, and even take preventative measures against potential dangers. Software that monitors a bank's network for potentially fraudulent activities has recently been implemented by financial institutions. They have contracted part of this job out to security firms that have developed very advanced software that is able to spot potentially malicious actions taking place on a network even before it is too late to do anything about it. In the banking and financial business, cybersecurity is one of the most crucial components, and as such, it should be given top importance. For example, due to the fact that it involves money, which is the most precious resource in the world. Banks invest millions of dollars every year on cybersecurity initiatives and put in countless hours to secure their networks from being breached by hackers. (Lukings and Habibi Lashkari, 2021)

OBJECTIVE:

The research aimed to fulfill the following objectives:

1. The study the Protection against cyberattacks within the financial services sector

2. The Banking and Financial Industry: The Importance of Cybersecurity

3. Financial services sector cyber security solutions

METHODOLOGY:

The fact that more and more cyberattacks are being launched against corporations in the financial services industry is evidence of the fact that these businesses are increasingly reliant on technology to address many of the challenges they confront. A large number of financial institutions depend on big data in order to enhance their market share. Utilizing consumer databases, social media platforms, and news feeds are all ways that financial services providers may better understand their existing clientele and find new ones.

The strain that is put on academics to offer fresh and expanding harvests of highly competent security specialists is a direct result of the inherent hazards that are linked with technology. It's possible that the banking sector has made a mistake right out of the gate in the competition to keep one step ahead of malicious actors online. "While financial institutions are aware that security is a concern, many of them aren't prepared and don't know how to battle the increasingly sophisticated techniques of cybercriminals," a website blog maintained by the University of San Diego states. According to RSA's explanation, "Recent polls portray a picture of an industry that sees the writing on the wall but frequently finds itself operating with the technical equivalent of whiteout.".

Protection against cyberattacks within the financial services sector:

Without a doubt, the field of financial services need a greater number of highly skilled cybersecurity personnel. There is now a skills gap in the area of cybersecurity, which impacts every sector; nevertheless, organizations that offer financial services are typically high-profile targets, and as a consequence, have a particularly high obligation to maintain a high degree of cybersecurity awareness. This chasm has far-reaching consequences for all economic sectors. Banks and other financial organizations face a growing number of cybersecurity rules and regulations since they are the custodians of sensitive client information. This is due to the fact that financial institutions are the information gatekeepers.

Financial institutions are under increasing pressure from regulators and the need to safeguard their brands, prompting calls for them to pool resources and work together to improve the sector's overall cybersecurity preparedness, response, and resilience. We're doing this to help the industry as a whole thrive. The term "financial services providers" encompasses two distinct sets of businesses. people who have been victims of cyberattacks in the past and those who may be victims in the future. As a result of the difficulty in preventing unauthorized access to sensitive customer data, numerous banks and other financial organizations have fallen victim to data breaches in recent years.

Between the years 2009 and 2019, many security holes were found in some of the most well-known companies in this industry. During this data period, there were five separate breaches at American Express, five separate breaches at SunTrust Bank, four separate breaches at Capital One, and four separate breaches at Discover. (Smith and Dhillon, 2019) According to the IBM Security Cost of a Data Breach Report, the average cost of a data breach in the financial services sector in 2019 was $5.86 million. Only the healthcare industry has a higher cost per breach, although this is still more than 1.5 times higher than the public sector.

In the financial services industry, the majority of data breaches are caused by malicious software and hacking attempts. On the other hand, both unintentional disclosures and threats from insiders are on the rise. It is anticipated that increased use of cloud computing would bring to a rise in these dangers during the next several years.

According to figures that are generally acknowledged for this industry, hackers and malware are responsible for 75% of data breaches, while unintentional exposure accounts for 18%, threats from insiders account for 6%, and physical breaches account for just 2%. Consumers face a relatively low level of direct danger as a result of cyberattacks on financial institutions. U.S. federal law protects consumers by requiring financial institutions to reimburse them if they report an error on their account statement and it is discovered within 60 days. This rule protects customers from legal action so long as they use common sense when it comes to safeguarding their personal data. But the government's backing for the banks is waning. The United States Department of the Treasury's Financial Stability Oversight Council is charged with monitoring the stability of our country's financial system. Some people believe that this group is not doing enough to prepare for potential cyberattacks that might endanger the financial stability of large institutions. (Tian et al., 2022)

The Banking and Financial Industry: The Importance of Cybersecurity:

For a number of different reasons, the demand for increased levels of cyber security in the banking industry is rapidly increasing. There are a variety of factors that contribute to the significance of cybersecurity in the banking and financial sectors, such as the following:

· The financial industry is very delicate and requires security from all different kinds of assaults.

· The banking and financial industries are privy to highly confidential personal information and data pertaining to their clients. It must be protected from unauthorized entry and theft in order to fulfil its purpose.

· The services provided by banks and other financial institutions have the potential to upset the country's economic activities. Because of this, it is imperative that they be shielded against any and all forms of cyberattacks.

It is impossible to understate the significance of the fact that cybersecurity is effective in the banking and financial business. Because it plays an essential part in awarding against the many forms of online assault that may be launched against financial institutions and banks. There is no doubt that the financial sector is the pillar that supports the economy.

As a result, it is essential that it be shielded from any form of danger. In order to prevent falling prey to the traps set by hackers, personnel of financial institutions also need training. (Gutiérrez Ponce et al., 2021)

Why is cyber security so difficult in the financial system?

The financial services sector is especially vulnerable to cyberattacks because, as the old cliché goes, "that's where the money is." Con artists nowadays use more intricate methods to steal from their victims. However, for the criminal mentality, nothing beats the prospect of electronically transferring money from one account to another account under their control.

The rise in assaults has not gone unnoticed by authorities, who have responded by ratcheting up the one on businesses to come up with answers. Consumers have faith in the financial sector because of the industry's commitment to meeting all applicable regulations and standards, which is both a major challenge and the single most essential basis for that faith.

According to a recent article published on the Kirkpatrick Price website by blogger Ashlyn Berget, the banking sector has been subjected to further regulatory supervision in the previous two years, on top of already cybersecurity legislation. (Kaur et al., 2021). Department of Financial Services of the State of New York Section 500 of Title 23 of the New York Administrative Code addresses cybersecurity regulations for financial institutions. In regards to cyber security, the US Securities and Exchange Commission (SEC) has released some interpretative guidelines.

Twenty-four states in the US have approved some kind of cybersecurity-related legislation or resolution. In the financial industry as a whole, third-party providers play a significant role.

This sector is really just a collection of companies who have joined up to make it seem like they provide a unified service to the public. The financial services sector has a significant issue in the form of the management of vendor risk. Every major, well-known financial service provider employs a significant number of smaller enterprises that offer a wide range of back-office services. Additional cyber risk is introduced throughout the process of assessing, auditing, and managing each of these businesses.

There has been a rise in the desire for banking services that do not need the use of currency. They're looking for programmed that can be accessed quickly yet safely. They'd want to be able to send and receive money online with the press of a button, but they need it to be secure against hackers. Companies in the financial sector often have difficulties in keeping up with the most recent developments in computer and application security, which increases the need for highly trained security experts in this sector. (Pendley, 2018)

Figure 1: CybersecurityIn Finance

Financial services sector cyber security solutions:

The pace of technological advancement is outpacing the ability of the banking industry to keep up with it. Even if they don't generate much of a problem for the banks' customers, legacy systems that are difficult and costly to update may be a source of considerable danger for the financial institutions that employ them. As a result of advancements in technology, hackers may more easily breach older computer systems. According to research (Lukings and Habibi Lashkari, 2021),

The banking sector is one sector where two-factor authentication has not yet been widely used (2FA). The banking industry's go-to approach for establishing two-factor authentication (2FA) is sending a one-time code to the customer's mobile device. The hacker needs access to the user's computer and mobile phone credentials to do this. The use of a two-factor authentication is currently not required by many financial organizations in order to access client accounts. They often argue this because their customers find that 2FA is too complicated to use.

To fulfil the ever-increasing demands of their customers for an improved level of usability, businesses have no choice but to use the most cutting-edge information technology. There is a lot of pressure on app and software developers to create a better user experience, and this pressure may cause them to ignore security concerns. Maintaining the safety of a Develops environment, one in which security responsibilities is dispersed throughout the whole of the development and operations process, calls for the knowledge of security professionals who are up to date on the most recent programming and security trends. (Kozminykh, 2018)

Companies like Norton have created methods to safeguard against even zero-day attacks. These approaches are predicated on the idea that although there may be an endless number of illegal or malevolent behaviours that bad actors might use to attack a target, there should only be a limited number of legal activities permitted on financial systems. These methods were created by corporations like Norton. Developed as a "white list" of permissible behaviours, OS-centric solutions may now prevent system activities from proceeding if they don't follow a certain pattern. This tactic has the potential to block a large number of cyberattacks, the effectiveness of which relies on spotting and capitalizing on anomalies in user behaviours.

The leaders of the banking industry need to come to terms with the idea that computer hackers will always find a way in. It's possible that the problems stem from the organization's computers, networks, or even its internal processes. The establishment of a technical firewall is only the first step in the development of an intricately layered Defence.

Research has shown over and over again that human mistake presents the greatest threat to security. Attacks based on social engineering are often used by cybercriminals. Phishing emails, which are sent by hackers to victims in an attempt to deceive them into downloading malware, have been used for many years. Hackers are increasingly turning to social networking websites as a method for acquiring information that may be used to groom or blackmail employees of financial institutions. Scammers can install malicious software on a company's computers by first gaining access to the company network by cultivating a relationship with a member of the company's staff or by taking advantage of that member of the staff, and then exerting pressure on that member of the staff to provide confidential information.

Many financial institutions have recognized the value of establishing or acquiring a penetration team. Through the use of red team and blue team games, it is feasible to locate cyber vulnerabilities, and the internal cyber defenders will profit immensely from the training. (Aschi et al., 2022)

Figure 2: Cybersecurit at Financial Institution

CONCLUSION:

Everywhere you look, cybercriminals are tormenting the financial sector. In fact, only the healthcare business is under more persistent attack. Private information, in particular, is the lifeblood of the enterprise. In this sector, regulators keep a careful watch on all cyber occurrences and are prepared to impose stricter rules and regulations if necessary. Users of the internet and mobile apps have grown to expect a cashless, seamless, and frictionless experience. The financial services sector is not immune to the global shortage of cybersecurity experts. As a consequence of this convergence, we have what may be called "perfect conditions" for the rise of cyber hazards. Given the current state of affairs, this sector should be commended for providing a level of safety that most buyers find acceptable. Yes, but at what cost? Some providers of financial services are worried that the basic expenses of compliance and resilience may be too much for them to bear. It would be awful for market competitiveness if only the largest corporations were able to withstand something like this. This is not a good indicator for repeat business or new clients in the long run. The financial services industry is primed for a game-changing innovation that will improve upon the status quo and make it possible to conduct transactions with more peace of mind.

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Received on 27.06.2023 Modified on 30.12.2023

Asian Journal of Management. 2024;15(2):137-141.

DOI: 10.52711/2321-5763.2024.00023