As customers conduct more transactions through online banking and banking applications, risks also increase. Data presented by Statista indicate that in 2023, the highest number of cyber incidents in the financial sector worldwide was recorded since 2013. Specifically, 3,348 incidents were registered, compared to 1,829 in 2022 and 2,527 in 2021. Additionally, the number of data breaches also increased, rising from 690 in 2021 and 477 in 2022 to 1,115 in 2023.
According to an IMF report, in the last two decades, almost one-fifth of reported cyber incidents affected the global financial sector, causing $12 billion in direct losses to companies in the industry. The report also highlights that banks are a prime target and that loss figures are likely much higher when considering indirect losses and reputational damage.
Another report from the World Bank indicates that in 2024, Latin America and the Caribbean became the region with the highest increase in reported cyber incidents, with an average annual growth rate of 25% over the last decade. Moreover, it is also the least protected region, with an average cybersecurity score of 10.2 out of 20. Public administration and finance are the two most targeted sectors in Latin America and the Caribbean.
Financial Cybersecurity
In a context where fraud and cyberattacks on banks are increasing and financial institutions are prime targets for increasingly sophisticated criminal organizations, companies in the sector must refine their financial cybersecurity strategies and policies. These measures are necessary not only to prevent bank fraud and associated losses but also to protect customer data and information and maintain user trust. It is important to highlight that criminal groups target not only financial institutions and their online banking services but also Managed Service Providers (MSPs) that support these institutions. Therefore, cybersecurity policies and strategies must also cover these providers.
Organizations should develop zero-trust approaches, which mean that “no user, system, or device should be trusted by default, whether inside or outside the network.” Additionally, they must develop proactive resilience strategies for their digital banking platforms and ensure security in their applications, focusing on early threat detection and rapid response. To achieve this, they should design incident response plans.
Since criminals leverage the latest technologies and techniques, financial institutions and their partners must automate their defense strategies through the integration and orchestration of security platforms and tools. In this regard, it is essential to apply advanced technologies such as AI-Data driven threat detection.
Organizations must also deploy multi-factor authentication (MFA) strategies and require multiple forms of verification before granting access to sensitive systems. At the same time, they should have plans and protocols for crisis recovery in the event of cybersecurity incidents.
Fraud Prevention
It is crucial that financial organizations understand the threat landscape and how it is evolving. Additionally, it is essential to comply with existing cybersecurity regulations.
Among the preventive measures that should be taken, the following stand out:
- Regular security audits.
- Penetration testing.
- Real-time monitoring (both network traffic and customer behavior).
- Consistent data encryption.
- Employee training and awareness programs.
However, even with proactive and preventive technologies and approaches, a clearly established policy from management is required, along with continuous efforts to instill a culture of cybersecurity throughout the company.
At Baufest, we offer advanced cybersecurity services and support financial institutions in strengthening their strategies in this field. This ensures that their digital banking platforms and applications are secure and provide the best possible experience for their customers.