How cybercriminals are targeting new financial services

Cybercriminals pose a major threat to all industries. For financial services, a sector that is entrusted with the most sensitive of customer information, the threat is particularly concerning.

This is an area where many financial institutions (FIs) feel they could be performing better. A recent report published by Capgemini’s Digital Transformation Institute revealed that only a fifth (21 percent) of banking executives have confidence in their company’s ability to detect a breach, let alone defend against it.

There has also been research suggesting that emerging financial services like online lending are particularly at risk from cybercriminals.

In its latest Cybercrime Report, security technology firm ThreatMetrix warned that one million cyberattacks targeted online lending transactions last year. That number is expected to rise this year, posing a threat to transactions worth some $10 billion.

The number of attacks specifically targeting alternative lending has risen by 150 percent since Q3 last year.

Vanita Pandey, vice-president of strategy and product marketing at ThreatMetrix, explained that online lending is attracting the attention of cybercriminals because of its recent growth in popularity and fast transaction cycles.

“Online lenders are under increasing pressure to adopt smarter authentication methods that leverage real-time, behavior-based intelligence to accelerate genuine loans and prevent fraud,” she added. “This is the only way to thrive in an increasingly competitive market.”

Looking at the global picture, the study noted that emerging economies are increasingly appearing on “the cybercrime frontlines”. Brazil was a “major attack destination” in the fourth quarter of 2016, while countries like Tunisia, Ukraine, Malaysia, Qatar and Cuba all experienced more attacks. Identity fraud is the main form of attack in these sorts of markets.

One factor that does appear to be in the industry’s favor is the level of trust customers have in their providers, particularly established FIs.

Capgemini’s research showed that customer trust in cybersecurity standards is higher for banks and insurers than any other sector. Businesses now have the responsibility to show that trust is justified.

 

Image: iStock/welcomia

Written by Jack Dougal