WITH more people opting to use digital banking, Moody’s Investors Service warned that the banking sector’s vulnerability to cyberattacks is on the rise as well.
The debt watcher said the lockdown measures to contain the coronavirus disease 2019 (Covid-19) have accelerated the adoption of digital banking for both businesses and consumers.
Moody’s said that social distancing has increased demand for online services such as contactless payments and digital cash transfers. These consumers now expect better user experience as they will not likely return to brick-and-mortar banking even after the lifting of lockdown measures.
On the part of the banks, the credit-rating agency said that business decisions have become more data-driven amid the increased use of technology to back it up.
“Additionally, the widespread implementation of remote work during the pandemic will likely lead to more bank employees working from home on a regular and long-term basis,” Moody’s said.
While these boosted banks’ productivity amid the pandemic, this has also made the financial institutions more vulnerable to cyber threats, it added.
“Greater demand for and dependence on digital banking technology has increased the risk of successful cyberattacks by increasing the strains on banks’ critical IT infrastructure through the rapid rollout of new digital solutions for customers,” Moody’s explained.
Scammers, for example, are baiting customers through phishing e-mails or social engineering to acquire bank information, Moody’s cited.
Citing VMware Carbon Black, the debt watcher said the most common cyberattack vector was wire fraud transfers. Fraudsters usually take the opportunity to infiltrate the wire transfer verification process should they find gaps.
Moody’s said that cyberattacks usually go for personal data (77 percent), credentials (35 percent) and bank data (32 percent).
“The average overall cost of a data breach for the financial sector is $5.9 million, second only to that in the health sector,” it cited.
Amid the threats, Moody’s said the banking industry is well prepared to face the potential attacks with cyber risk awareness and mitigation measures in place.
The credit-rating firm said it was “important to ensure organizations allocate sufficient budget to information security and to make certain that management will be appropriately engaged during a crisis.”
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