Contemporary criminals don’t have to don a mask, grab a gun, and visit a branch to steal money. Instead, they can reach into accounts virtually, without ever leaving their homes. Cybercrime takes a lot of different forms, and your financial institution needs to take steps to minimize the risk across the board.
But first, you need to understand the risk. To get a sense of the problem, take a look at these stunning statistics about cybercrime in 2020.
1. Data Breaches Nearly Quadrupled
During the first quarter of 2020, large-scale data breaches increased by 273% compared to the same quarter the previous year. This happened due to the large numbers of employees who started working remotely and as a result of cybercriminals’ attempts to capitalize on international confusion and panic around the coronavirus.
2. Ransomware Attacks on Banks Increased by Ninefold
During this same time period, ransomware attacks on all types of businesses increased by 90%. In these attacks, cybercriminals take over a business’s network and demand a ransom in order to release hold of the files.
However, the increase was even more significant in the banking sector. Over a quarter of these attacks targeted businesses in the healthcare and financial sectors, and banks, in particular, saw a ninefold increase on the number of ransomware attacks.
In other words, while businesses in general faced a 90% increase in ransomware attacks, banks saw a 800% increase.
3. Destructive Attacks Doubled
Destructive attacks can bring down an entire network and all its data, and at the beginning of 2020, these attacks increased by 102%.
4. Island Hopping Is on the Rise
A relatively new strategy in the crybercriminal’s toolbox, island hopping relies on gaining access to a small company’s network and using that opening to target a larger organization. In 2020, island hopping increased by 33%, and arguably, it’s becoming a more significant threat for banks.
5. Fake Account Takeover Attempts Jumped With PPP Loan Distributions
Cybercriminals pay attention to what banks are doing, and when Paycheck Protection Program loans hit accounts, criminals responded with a surge in account takeover attempts. On that day alone fake account takeover attempts increased by 80% as criminals used old or stolen credentials to try to log into accounts and drain their cash.
In fact, the effort was so expansive that many large banks had their websites go down due to the unexpected increase in traffic.
6. Cybercrime Complaints Increased Three to Four Times
Prior to the Covid-19 pandemic, the Federal Bureau of Investigation (FBI) was receiving about 1,000 complaints per day about cybercrime. After the pandemic became an international concern, the FBI began receiving 3,000 to 4,000 cybercrime complaints per day.
7. Social Engineering Is a Growing Risk
When criminals can’t get past cybersecurity solutions, they have to rely on their wits, and increasingly, they are using social engineering to convince banking customers or employees to reveal information.
While the majority of data breaches (52%) still involve hacking, social engineering is on the rise and is currently involved in 38% of cyber attacks.
8. Businesses Experience a 7.27% Dip in Value After a Cyber Attack
On average, a cyber attack leading to a data breach affects 10 million to 99 million records, and as a result of these losses, companies decline an average of 7.27% in value.
9. Financial Firms Face 40% Higher Cybercrime Remediation Costs
The loss in value may be even more striking for banks and other financial institutions. While there are no clear numbers on the overall decline in a bank’s value after a cyber attack, research indicates that banks pay an average of $18.5 million per attack.
This is 40% higher than the overall average of $13 million. Note these numbers only include costs directly related to the incident. They do not include lost customers, brand damage, or other long-term remediation costs.
10. Insider Attacks Are the Most Expensive for Banks to Resolve
Banks and financial services firms face the highest costs for insider attacks. On average, these attacks cost $243,000, and they take 55 days to resolve. In contrast, financial institutions generally deal with ransomware attacks in 34 days and web-based attacks in 26 days.
Now that you know the facts, it’s time to make sure you have adequate protection in place. You need high quality automated tools that can reduce payroll hours, save time for employees, and effectively reduce the risk of cybercrime on your financial institution.
At SQN Banking Systems, we stay abreast of the most recent fraud and cyber crime threats, and we provide financial institutions with tools to minimize these risks. To learn more, contact us today at (609) 261-5500.