It all started in 1994. Back then, Stanford Federal Credit Union became the first bank in the US (and supposedly in the world) to have a presence on the internet; they had launched their website. By then, they had recorded 4 banking transactions over the internet. 27 years later, the banking industry took an astonishing leap: going from allowing customers to pay bills through an internet portal to concentrating all payment methods in our smartphone’s virtual wallet (with the use of NFC1 and other relevant technologies).
This progress towards digitalization has allowed the market to improve in several ways: cheques have almost disappeared, cash is less, and less common, plastic cards are now being discarded, and no one remembers the last time they went to a bank branch. But as financial digitalization evolves, so does cybercrime, impacting severely the banking industry.
As stated by the Secretary-General of INTERPOL2, Jürgen Stock, “cybercriminals are developing and boosting their attacks at an alarming pace”, often exploiting the fear and uncertainty caused by the unstable social and economic situation created by the COVID-19 pandemic. In 2020, the cybercrime industry saw a surge of 400% globally.
According to Cybersecurity Ventures, global cybercrime damage is expected to reach US$ 6.5 trillion annually by the end of 2021, and $10.5 trillion by the end of 2025. Another shocking figure to highlight is the total growth of the global cybersecurity market. In 2004 it was worth approximately $3.5 billion, and in 2020 it was grater than $120 billion3.
Additionally, Ransomware damage costs are predicted to have grown more than 57 times from 2015 to 20214. This cybercrime, which consists of hackers blocking access to the software or personal data in exchange for a ransom, has become increasingly common.
A study on financial services cyber risks conducted by the International Monetary Fund and published in December 20205 recommends six strategies that can easily yet effectively contribute to strengthening cybersecurity and improving financial stability worldwide:
- Cyber mapping and risk quantification
By increasing the understanding of the financial system’s interdependencies and interconnections, risks can be better detected and mitigated.
It proposes that, by reaching agreements on regulations internationally, the individual compliance costs will reduce.
It’s of paramount importance that all financial institutions develop measures and policies to overcome attacks and safeguard systems’ stability.
Cybersecurity should become common ground in all financial institutions rather than a point of competition. Cooperation is key in preventing data breaches and strengthening cyber defense within the industry.
Strengthening law enforcement and the prosecution of cybercriminals will increase the risks and the costs of doing a cyberattack and could help prevent these crimes.
To increase cybersecurity and mitigate the risks of being attacked, all organizations must work in increasing and updating their knowledge on cybersecurity. Every individual who takes part in an organization represents a point of attack to the system and developing capacities to prevent security breaches should be as inclusive as possible.
Maintaining the security and privacy of our clients’ confidential data is one of our top priorities at LPA. Our Information Security Management System
is certified as compliant with ISO 27001:2013, the internationally recognized standard for information security management. We are certified as compliant at all development sites, applying all the standard’s controls.
, we’re committed to making digital banking
and cybersecurity go hand in hand, contributing to building a more digital yet more stable industry for our clients.