5 reasons cybersecurity is a top priority for the banking industry

5 reasons banks are focusing on cybersecurity

April 28, 2022 12:09 PM

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Increased ingenuity of hacking groups around the world is causing concerns as data breaches continue to plague the banking industry.

Whether the threat is potentially state-sponsored or has been masterminded by a teenager, here are five data breach stories that have got banks worried about cybersecurity.

When hackers' access is too easy

Brazilian hacking group N4ughtySecTU accessed 54 million personal records from a TransUnion South Africa server in March.

Compounding the severity of the incident was the apparent ease with which the hackers were able to compromise the server. The group said the password they used to gain access was “password,” the fifth most common password in 2020, according to virtual private network provider Nordpass.

TransUnion confirmed the data breach, but declined to comment on the issue of the password. While the hackers have demanded $15 million to not publish the records, TransUnion said it will not give in to extortion.

Read more:

TransUnion South Africa hacked; attackers say password was ‘password’

Teen hackers

A wide-ranging U.K. police investigation into hacking group Lapsus$, which claims responsibility for cyberattacks against companies including Microsoft and Nvidia, culminated in the March arrest of seven people, ages 16 to 21.

Cybersecurity researchers looking into Lapsus$ hacking activity traced the breaches to a 16-year-old in Oxford, England, the apparent mastermind of the group.

In line with U.K. practice for nonviolent crimes, the suspects were released pending the outcome of the ongoing inquiry. They were also not identified in accordance with strict U.K. rules forbidding the release of information about suspects to avoid prejudicing a jury.

Read more:

U.K. police arrest 7 related to Lapsus$ hacks on tech firms

Third-party data breaches

In other developments from Lapsus$, identity management firm Okta, whose clients include banks and credit unions such as Ally, First National of Nebraska and Travis Credit Union, announced in late March that the hacking group had accessed certain data through third-party contractor Sitel.

Okta revealed that information on 366 of its customers was compromised, but that the data the hackers could see was “limited to the access that support engineers have.”

However, the disclosure comes months after the incident took place in January, raising important questions about why it took Okta so long to share the information with its customers.

Read more:

Okta says data leak came from breach of third-party customer support provider

'Digital Pearl Harbor’

Russia’s ability to use cyberattacks is well documented, but following the invasion of Ukraine an anticipated large-scale breach has not yet materialized.

Fears that Russia would deploy cyberweapons on the banking industry increased after sanctions were imposed in early March. Senior executives at several banks were particularly wary of an attempt on Swift, the international payments network. However, no attacks on U.S. banks have been reported.

“Cyber has not been a major part of this conflict so far,” said Jason Healey, a senior research scholar and adjunct professor at the School of International and Public Affairs at Columbia University. Experts have different theories about why, but all agree the threat remains.

Read more:

U.S. banks haven’t had a ‘digital Pearl Harbor’ yet. Is one coming?

Data breach disclosures

Lake Shore Savings Bank in western New York became the latest regional bank or credit union to report “unauthorized access to certain data in its internal systems” in a filing with the SEC, joining at least four others suffering a data breach since January.

While the bank said there was no reason to believe that the data accessed had been “misused,” it moved quickly to offer customers identity protection services.

Cybersecurity incidents increased markedly during the pandemic, prompting the SEC and FDIC to propose new counter measures. These include a bill currently before President Biden requiring firms vital to the country’s “critical infrastructure” to report data breaches within 72 hours.

Read more:

Small New York bank reports data breach