As a bank or lender, you process sensitive information on a daily basis. You can’t afford to take a lackadaisical approach to cybersecurity. Yet, if trends in this industry show us anything, it’s that most aren’t doing enough to neutralize the increase in cyber threats.
Financial Institutions in the Crosshairs
For several years, the risk of a bank failure from a serious cyberattack has been increasing. Financial institutions are 300-times more likely to be targeted than other institutions. And ever since hackers successfully heisted $100 million from a central bank in Bangladesh in early 2016, global institutions have been on high alert.
When asked what he foresees as the biggest threat to the financial system, Federal Reserve Chair Jerome Powell doesn’t hesitate to bring up cyber attacks.
“The thing that we worry about a lot is cyberattacks,” he said in a 2020 testimony before the House Financial Services Committee. “I think we have a great game plan for traditional issues like bad loans and things like that. It’s more cyberattacks is really the frontier where you worry,”
Powell’s worry is not misguided. There have been 200 documented cyber incidents targeting financial institutions since 2007. And with each year that passes, these attacks are becoming more frequent and ferocious. (You can see a live timeline here.)
Banks, credit unions, and other lenders face especially high risk. In addition to money, it’s the data that hackers are interested in. And as any lender knows, sensitive data is ubiquitous in this industry.
4 Was Lenders Can Improve Cybersecurity
You probably already have a basic cybersecurity strategy in place. The question is whether a “basic” approach is enough to protect against today’s advanced attacks. And while we highly recommend meeting with a cybersecurity consultant who can develop a strategy that’s uniquely tailored to your needs, here are several broad ways lenders can improve their approach to cybersecurity in 2022 and beyond:
1. Go All-In on Encryption
Encryption is the name of the game. You should be encrypting everything that enters your system, whether it’s passing through, resting, or being actively used. The old method of setting up a perimeter and standing by to watch is no longer effective. You have to focus on resiliency. In other words, your systems need to be designed in such a way that they remain protected even in worst-case scenarios where a breach occurs. Encryption does this for you.
Encryption should be such a priority that you’re actively seeking it out anytime you add a new tool, application, or software into the mix. For example, SPARK (one of the top small business lending solutions on the market) is a SOC 2® compliant cloud-based platform that uses secure encryption to amplify privacy throughout the entire loan origination process. This is something you should look for when selecting loan origination software.
2. Train Employees
You’re only as strong as your weakest link. Unfortunately, the weakest link is usually an employee. You can have all the best technology and processes in place, but if your employees aren’t equipped to make wise decisions, this will fall by the wayside.
If you want to keep your business safe, you must train employees on the latest security principles. Teach them how to implement strong passwords, what to look for in email phishing, and how to ward off other online threats. Give them the knowledge they need to see threats and report them before they become serious problems for the company.
3. Use Secure Connections
A secure internet connection is at the heart of a strong cybersecurity strategy. And like other aspects of your strategy, the key is to implement layers of security.
Start with a firewall to prevent outsiders from accessing data on your private network. (And if employees are working from home, they need their own firewall connections, too.) Likewise, it’s smart to implement a virtual private network (VPN) to mask your IP address and maintain some level of anonymity while browsing the web.
4. Avoid Email Threats
Email is highly convenient, but it’s not the safest mode of communication. Never download attachments and always require clients to upload files to the cloud (rather than sending them over email).
Put your Best Defense Up
You can’t prevent an attack from occurring. You can, however, put up strong defenses that neutralize these attacks and protect your sensitive data from being lifted. Use this article as a starting point, but be sure to consult with a cybersecurity professional before proceeding.