Internal security breaches at banks, be they regional, national or international, are growing faster and faster, with more sophisticated threats becoming commonplace. External attacks have always been around, but with the advent of dependency on data to move banks forward, internal employees are finding ways to thwart their employers, the banks, of their data.
Financial institutions are investing heavily in technology, but pushing away employee training. From disgruntled employees committing sabotage to innocent mistakes, the biggest threat facing banks is the human factor working inside. Here are a couple ways in which banks are facing some internal data breach obstacles:
There has been a sharp rise in vulnerability for financial institutions when it comes to data breaches. The biggest factor playing a role? Employees. Employees may not know it in real time, but they are actually helping scammers out with data breaching schemes by opening emails or links that then install malware and mine information.
Insider involvement accounted for more than half of all breaches in 2016. To limit this damage, banks have to work harder to educate staff and keep them up to date on cybersecurity. Cyber defense has to begin internally through cultural overhauls, instead of depending so much on technical overhauls. With more than half of all breaches falling on the shoulders of bank employees, banks need to be more diligent in bolstering security and education around it.
Open banking is the democratization of access to data previously owned exclusively by legacy financial institutions. There are a number of factors pushing this trend forward, most obviously the regulation that forces banks to allow customers access to their data, or give third parties access.
Banks catching on to this trend are taking a number of different approaches to it. They are complying with regulation and falling in line with the concept of open banking to maintain their retail dominance. Open banking is forcing retail banks to rethink their business and operational models if they want to stay ahead of the curve in and industry that is rapidly evolving.
However, this is opening banks up to more risk as data is being shared more easily and freely. While the trend may be exciting and promote long-term benefits, it’s still in its infancy, which can only mean fragility and vulnerability in the face of scammers. Essentially, the call is coming from inside the house.
Banking institutions should be diligent about vetting everything from data sharing and open banking, but should also be responsible in terms of keeping integrity and security top priorities. With a bankers liability policy, banks and their employees can find peace of mind in a constantly changing, and ever-threatening, financial ecosystem.
About Financial Guaranty Insurance Brokers
Since 1983, Financial Guaranty Insurance Brokers has distinguished itself as a provider of Professional Liability, Cyber Liability, and Crime insurance products for entities of all types. To receive timely, personalized service from a knowledgeable and experienced staff, call us today at (626) 793-3330 to speak with one of our professionals.