Cost-cutting opens doors to cybercrime

cyber-security

Pressure to close bank branches and digitise all functions means that major financial institutions are putting customer data at risk in order to save money.

A proliferation of digital routes to banking from leading lenders means that hackers have more and more ways in – and banks are upping the pace rather than tackling the issues, according to a damning report in the Financial Times.

The Financial Conduct Authority has warned that one of the UK’s biggest banks has potential loopholes in its security setup that could put millions of customers’ data at risk. Meanwhile, mobile banking apps are soaring in popularity and banks are anxious to meet expectations that traditional payment and banking functions can be completed online, rather than focussing on closing these loopholes first.

“Whether it is external data feeds, customer and staff devices or cloud services, banks find themselves having to adapt to relying on systems that are outside their control,” Nicola Crawford of the Institute of Risk Management told the FT.

Crawford pointed out that the security of these digital services are often outside of the banks’ control, relying on customer and employee devices or third party cloud services providers.

It is thought that many of the new challenger banks, some of which have similar back-end systems to their larger competitors but less experience of managing security breaches, may be most at risk.

 

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