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HOW BANKS CAN PROTECT THEMSELVES AGAINST RANSOMWARE

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Jay Ralph, Managed Cloud Global Sales Lead at SoftwareONE

 

We’ve seen a slew of high-profile ransomware attacks in 2021. From hackers compromising IT management software supplier Kaseya, to the long-running cyber-attack on the Irish health service, hackers have caused devastation to businesses. GCHQ say ransomware attacks in the UK have doubled in a year, with the banking industry being a particular target. Not surprisingly, hackers see banks as an ideal target due to the sensitive customer data, records and huge financial rewards they could reap if an attack succeeds. Globally, financial institutions experienced a 1,318% year-on-year increase in ransomware attacks in the first half of 2021, which is leading organisations to consider their security posture.

While large, multinational banks have robust cyber defences and more in-house cyber resources to fend off hackers, middle-market banks are more vulnerable to attack. These banks are less likely to use traditional, on-premises infrastructures, instead operating hyperscale and multi-cloud environments. This expands their digital footprint and can mean ransomware spreads more quickly throughout their IT infrastructure, putting them at greater risk of suffering major data loss and paying a ransom. The first step in avoiding this fate and fending off hackers successfully is for banks to know what they are up against. The following steps are those most commonly used by malicious actors using ransomware to attack financial organisations:

  • Social Engineering – Hackers prey on end-users’ trust and emotions. They require users to take an action, like clicking a link, which sets the ransomware process in motion. A dangerous email could be as simple as your boss seemingly sending you an appreciation gift card, or have an attachment purporting to be financial documents from a customer.
  • Executable Ransomware – Bank employees downloading an attachment or clicking a link triggers malicious code to write a file to the disk. Unfortunately, they have now downloaded and installed ransomware that executes when installed. From there, the ransomware spreads rapidly across the bank’s network and will execute on the malicious actor’s cue.
  • Fileless Attacks – When an employee clicks on the link or document, they download the ransomware code. However, they do not need to install the ransomware for it to execute and impact their device. Malicious code can hide inside legitimate applications, like Microsoft Word, which means any web-based application, storage location, or database is at risk. Fileless ransomware leaves little evidence as it doesn’t save anything on a device, which makes it difficult to find and remove it.

Typically, attacks happen at night or at a weekend. This puts strain on small IT teams at middle-market banks to carry out root cause analysis with limited insight into infrastructure. They must also communicate with key stakeholders on how the attack happened, its severity and impact, when it can be fixed, and whether to pay the ransom. Finally, teams must restore the affected data so the bank can get up and running. While protecting against ransomware might seem like a Herculean task for smaller banks, creating a proactive, defence-in-depth approach can mitigate both the likelihood and impact of a ransomware attack.

 

How to build defence-in-depth

Understanding vulnerabilities in their security strategy can help banks take a proactive approach to mitigate data breach risk. Here are four steps they can take to protect their business against ransomware:

  1. Start with Cybersecurity Awareness – Making employees aware of risks can help stop a ransomware attack ever occurring. Banks should look at training programs that offer baseline testing, to get a sense of what employees currently understand about cybersecurity and appropriate reporting to measure training effectiveness. They should use interactive and engaging content, incorporate gamification, and automate simulated phishing attacks to ensure users retain what they learn.
  2. Engage in Penetration Testing – Banks should schedule regular vulnerability assessments and penetration tests. Malicious code generally needs to engage in a pattern of behaviour as part of a ransomware attack, so it’s important that small banks test for these attack patterns and ensure their security controls’ effectiveness.
  3. Create a Regular Backup Plan – Many banks assume if they have Microsoft 365 that their systems are backed up. This is incorrect. Banks still need to set up backup and recovery procedures to prevent lost income and data from ransomware attacks. This can either be done in-house or through a partner. The ideal partner can automatically detect, compress, and duplicate data across your IT infrastructure, and will consolidate backup solutions to lower costs and maintain compliance with backup policies and security controls. They will also be able to restore data in the event of an attack, meaning the victim bank can concentrate on root cause analysis and communicating with customers and stakeholders.

Ransomware will continue to plague banks for as long as cybercriminals can make money through it. Any organisation of any size could be a victim, but there are steps smaller banks can take to mitigate risk of an attack and reduce impact on your organisation if one ever takes place.

 

Banking

WHY THE TIME IS NOW TO BANK BEYOND BORDERS

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by Lili Metodieva, MD of Monneo

 

As our world becomes more interconnected, so too does the need for banking systems to follow suit. In the past, businesses and individuals were often restricted to banking in a single country, but the rise of borderless banking is enabling both to benefit from greater financial freedoms. In this article, we will examine why this trend is so important and explain how Fintech companies are helping to make it possible.

 

What is borderless banking?

Simply put, borderless banking refers to any bank account, which allows users to spend, send and receive money across different countries and currencies, without incurring heavy fees. The concept has become increasingly popular in recent years, with more people now working in cross-border job roles and with many businesses requiring capital in a different currency than that of their country of origin.

For customers, borderless banking is making cross-border financial transactions more efficient and cost-effective. Through its rise, businesses and individuals can gain easier access to international streams of capital, which is crucial in this current moment of economic uncertainty. In fact, 74% of companies say cross-border payments have helped their business to survive [1].

 

Where do IBANs come in?

International Banking Account Numbers (IBAN) play a crucial role in facilitating borderless banking. The globally recognised system enables cross-border transactions to happen safely, by providing each international bank account with its own unique 36-digit alphanumerical code. On account of this code, financial institutions can quickly identify where funds are coming from, as well as where they’re going to.

More recently, providers such as us have been able to deliver Virtual IBANs (vIBAN). Working alongside a network of well-established European and International banks, we’re able to offer businesses a single platform interface that consolidates the management of all IBAN accounts. In turn, our multi-currency service makes conducting global financial transactions incredibly straightforward.

 

How has Brexit affected borderless banking?

The COVID-19 pandemic has accelerated the growth of borderless banking and services related to it, but other developments, such as Brexit are beginning to stand in its way. Most notably, the drawn-out withdrawal process has seeded a growing reluctance amongst risk averse, larger organisations to settle transactions using UK bank accounts or IBANs, due to unfounded concerns around regulatory complexity.

Despite leaving the EU, the UK remains a member of the Single Euro Payments Area (SEPA), so it’s unclear why these concerns around British IBAN accounts exist. Regardless, this unfortunate development must be addressed quickly as it has the potential to adversely affect the livelihood of businesses and individuals at a time of critical need.

 

What does the future hold for borderless banking?

There’s clear demand for borderless banking and borderless payments, but the discrimination of certain IBAN accounts represents a major obstacle, which could stand in the way of their widescale adoption. Moving forward, there needs to be a push towards borderless IBANs, which will make international financial transactions more reliable. At the end of the day, this is what IBANs were originally created for, so it’s important the current problems are rectified quickly.

To ensure this can happen, the industry needs protection and clarity from regulators. Likewise, it’s now time for membership organisations to stand up on behalf of the sector and lobby for the financial inclusion of businesses.

If the confusion regarding UK IBAN accounts can be sorted in a timely manner, businesses across the nation, as well as those further afield can look forward to a future of more streamlined and effective financial services. With this support, the diverse sector can deliver further access to innovative financial services and products, which improve outcomes for businesses and consumers alike.

As a sector, Fintech has the potential to provide vital assistance to the wider economy, particularly in an era of increased cross-border business. At Monneo, we’re committed to being part of that change and as a part of organisations like ‘Accept my IBAN’, are working towards reporting and ending IBAN discrimination.

[1] – https://www.mastercard.com/news/research-reports/2021/borderless-payments-report/

 

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Banking

IT’S TIME FOR BANKS TO SIT THEIR CUSTOMERS DOWN AND TALK OPEN BANKING

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Eugene Danilkis, CEO at Mambu

 

We are living in an experience economy, and banking is no different. Customers need innovative payment and finance management solutions. New entrants are edging into the landscape and challenging existing players. This should mean users have a better view of their finances and the tools they need to manage their money – but banks are failing to deliver.

Personal finances are a complex beast, emotional pulls are strong, and the worry of financial security is always on the mind. It’s the job of banks to be the shoulders customers can lean on and trust.

Open banking was supposed to take this to the next level, enabling banks to deliver personalised products and services based on improved data sharing and customer insights. But three years on, adoption remains sluggish. So, why is open banking failing to live up to its promise?

 

A missed opportunity

Open banking was introduced to the UK in 2018, but consumers are still mired in confusion as to what it means and how it helps them. According to Mambu’s global open banking survey, 61% of consumers say they’ve never used open banking, despite more than 8 in 10 using one or more mobile banking apps.

Eugene Danilkis

This is a problem for banks and consumers alike. Lack of understanding around the technology is hindering its adoption, despite this being in the best interests of both. By enabling the secure sharing of financial information, open banking creates an improved customer experience. Not only does this minimise friction and make online payments faster and easier, but allows for personalised services and greater automation, enabling customers to take advantage of tools like budgeting apps.

For banks, open banking is an opportunity to build innovative new products that will improve the customer journey, helping them retain accounts and acquire new ones. By collaborating with third parties, banks can hyper-target customers and build services that address specific user needs, increasing customer satisfaction and in turn brand loyalty.

It’s true there’s been a recent spike in open banking users. According to Juniper Research global, open banking users rose from 18 million in 2018 to 40 million in 2021. But this can be traced to the necessities of a pandemic rather than any sudden clarity in communications.

 

Putting customers at the heart of communication

Mambu’s research shows more than half of consumers (52%) have never heard of open banking. COVID-19 may have increased the uptake of the technology, but it hasn’t increased understanding among users.

So, what can banks do to encourage consumers to embrace open banking? Fundamentally, they must better educate their customers in terms they understand. This means talking to them like human beings, using clear and transparent language to simply explain the personal benefits open banking brings and why it’s really just smart banking.

The understanding gap between technology and terminology shows that consumer demand is there, but better communication is needed. Making sure consumers truly understand the tools they’re using, the control they now have over their finances and how open banking improves the customer experience is vital to dispersing the current fog of confusion. It’s the benefits of this technology that banks need to hone in on: customers ultimately care about what open banking can do for them and how it’s going to make their lives easier.

Centering the customer and their needs in this way will allow banks to fully realise open banking’s potential. The technology has already given them the opportunity to develop valuable services for customers that help build brand loyalty. But the industry has failed to put the customer at the heart of their communications and processes, and show them how much better banking can be.

 

Building trust

Key to reversing this trend is addressing consumer concerns around data privacy and financial safety. Yes, banks need to prioritise simplicity and clarity in messaging, but this isn’t an excuse to shy away from important conversations. Just because there’s an understanding gap around open banking doesn’t mean consumers aren’t switched on about tech and financial issues.

Mambu’s survey found nearly three in five customers have concerns about privacy and security in relation to open banking. So, it’s vital that banks provide reassurance and relevant information about data sharing from the outset if they’re to assuage these fears.

The industry can also encourage greater adoption by developing and improving open banking interfaces. Banks are the gatekeepers to how easily end-users can authorise certain actions, manage third-party access and navigate different open banking functions. If the interface is user-friendly, customers will have a better experience of the technology and be more likely to use and recommend these services.

 

Time to get talking

Customer communication is holding the industry back.. The ability of open banking to transform financial services is a concept that industry players are well-versed in. But the feeling isn’t mutual for customers.

Banks are failing to capitalise on the open banking opportunity by engaging with new and existing customers about what the technology can do for them. Debunking  common myths can open the door to increased growth and trust for banks, as they seek to open up new revenue streams post pandemic..

Make no mistake, open banking isn’t going away. But customers will if banks don’t get talking.

 

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