Mitigate the Top 3 Security and Compliance Risks for Your Bank

Financial institutions of every size and scope want to gain a competitive advantage with consumers. That means a push toward technology solutions. 

According to a consumer study performed by Plaid, 78% of U.S. consumers want the ability to connect their bank accounts to apps and services. Unfortunately, offering such services opens a wide range of security and compliance risks for banks. 

Today, the financial industry is one of the top five targets for cybercriminals. This is due to the volume of sensitive personal and financial information that is processed. Banks must manage these risks.

How can your bank implement mitigation strategies and security controls to offer customers the safest and best products on the market? Let’s look at the top three biggest threats to banks and how to protect your bank’s most important information.

Top Security Risk #1: Insider Threats and Unauthorized Access

There’s a funny saying in cybersecurity that goes:

“Hackers don’t break encryption; they find your keys.”

This is no laughing matter. Insider threats occur when a current or former employee, or a partner with legitimate user credentials, misuses their access. This misuse of access can lead to harm to the bank’s networks, systems, and data. 

Unauthorized access can occur when an employee has access to more resources than is needed for their job. This can include databases, servers, and other systems. This free range of access can put a bank in a vulnerable place. 

Examples of Insider Threats and Unauthorized Access

• A non-encrypted laptop. An employee's stolen laptop is a security risk. If their hard drive is not encrypted, then the thief can potentially access various confidential information.

• The employee responds to a phishing scam. An employee falling victim to a phishing scam can cause a virus to enter the organization. This puts the organization at risk of exposing sensitive information to external parties. Financial institutions are one of the most targeted industries for phishing activity. 

Eliminating Insider Threats and Unauthorized Access

Our security and compliance expert, Alex Griffiths, shared some best practices for avoiding insider threats and unauthorized access.

To manage insider threats and unauthorized access, banks need to:

• Develop and enforce clear security policies. With all employees on the same page, your bank can have a unified risk management goal. 

• Deploy monitoring systems to track and log user activities. This provides insight into all actions employees take within your systems. 

• Encrypt sensitive data. Whether it is at rest or in transit, data needs to have encryption to protect it from unauthorized access.

Top Security Risk #2: Compliance

All banks must be PCI compliant and follow a strict set of security standards. These standards are designed to ensure that companies that accept, process, store, or send credit card information maintain a secure environment. 

This is a hot topic in the banking industry. Most banks are running PCI compliant version 3.2.1. This version is set to expire in March 2024. The PCI Security Standards Council will release PCI 4.0 with 63 new requirements. 

Maintaining a Compliant Environment

To keep your bank compliant and avoid severe penalties, banks should:

• Thoroughly vet contractors and vendors. Partner with fintechs that prioritize compliance and understand the industry requirements. You want to make sure you’re providing the safest solutions to your customers and employees.

• Stay up to date on regulatory changes. Have a plan to keep your bank compliant with new regulations and avoid rushed decisions that can lead to errors.

• Implement technology solutions and partners to review your bank’s compliance strategy. A good partnership can help your bank find any risks and enhance your overall strategy. 

As a leader in compliance, community banks can use data security as a competitive edge with consumers. Solid partnerships with fintech companies can help achieve this goal. 

Top Security Risk #3: Data Breaches and Cybersecurity Risks

We’ve all heard of companies experiencing data breaches. Cybersecurity awareness is becoming more common as our society’s technology advances. New types of cybersecurity threats are found every day. It is critical to have a security team and technology in place to protect your bank’s data. 

Avoiding Data Breaches and Cyberattacks

Banks can reduce cybersecurity threats by:

• Creating a proactive plan. Banks need a security team that is active and responsive to potential cybersecurity risks before potential harm affects the organization. 

• Knowing the latest threats and liabilities. Empower your security team and employees with an understanding of what threats exist in a digital ecosystem.

• Limiting access given throughout the organization. A bank can reduce the risk of security breaches by restricting access to sensitive data. 

Mitigate Security and Compliance Threats for Banks With Core10

At Core10, we understand the incredible pressure the financial services industry faces when it comes to security and compliance. Our goal is to help our banking clients execute risk assessments, develop mitigation strategies, and implement security solutions and controls. 

Here are three ways we instill a work culture that values security and compliance:

• SOC 2 (Service Organization Control Type 2) Compliant
  We maintain our SOC 2 certification and fully evaluate any partner to identify if they meet these distinguished criteria as well. 

• Follow Principle of Least Privilege
  Our team members receive the least amount of privilege, or access, needed to complete their job functions effectively. 

• Continuous Security Training and Updates
  From top to bottom, all employees complete routine security awareness trainings. We also follow the OWASP Top 10, which identifies the most common web application vulnerabilities. 

Risk management is a critical part of integrating new technology for consumers. To offer cutting-edge financial technology, banks need to understand the cybersecurity risks and develop a plan to mitigate threats. Luckily, they don’t have to do this alone. Connect with a team well-versed in regulatory and compliance requirements as well as the leading financial trends.