The financial sector faces a bigger cyber threat than ever before, and decisive policy may just be the solution.
Amid the COVID-19 pandemic, hackers are taking advantage of the newly complex landscape of interaction in several crucial industries. The financial sector has proven one of the most ample targets: cybersecurity strategists at VMWare, a software and cloud storage provider, report that in the early months of 2020 alone, there was a 238% increase in cyberattacks against banks.
And although there is certainly a presence of independent malicious actors looking to profit from the chaos that COVID has perpetrated, experts now warn that Russia, China, and North Korea may also be attempting attacks on financial institutions—and state-sponsored hacking is an even more serious threat.
This intel, and more, came to light at a hearing last week led by the House Financial Services subcommittee on national security, international development, and monetary policy, organized to address the mounting cyber threat.
Testimonies at the hearing included Jamil Jaffer, founder and executive director of the National Security Institute at George Mason University, who argued that the financial sector should come together and work in favor of the industry’s aggregate interests in order to best protect itself.
In the end, the subcommittee issued a series of bills designed to combat cyber threats and hackers, state-funded and independent alike.
One measure, proposed by Rep. Brad Sherman (D-CA), specifically addresses business email compromise (BEC) scams. These social engineering schemes involve manipulating an organization’s employees into transferring money to fraudulent accounts, which, for obvious reasons, is a heightened concern for banks and other organizations that manage financial accounts.
Rep. Tulsi Gabbard (D-HI) proposed another measure that requires depository entities (banks and credit unions, among others), to develop ways of educating customers on how to avoid financial scams. Yet another proposal involves funding state initiatives to protect senior citizens from cyberattacks; cybercrime against the senior population has increased five times since 2014.
The subcommittee also plans to provide restitution to those affected by COVID-related fraud. Hackers aren’t just going after banks—a Secret Service official at the hearing estimated that of the latest COVID-19 stimulus package sent to American households, at least $30 billion would be siphoned off by cyberattacks.
Additional precautions taken to combat cyber threats will also take into account the increased risk to mobile banking apps. Apart from being a potential portal to sensitive customer data, it also provides cyber attackers access to personal mobile devices.
“Cyberspace is not peaceful,” warns Tom Kellermann, head of cybersecurity strategy at VMWare and former member of the presidential cybersecurity commission under Obama. “[The financial sector] is generally more secure than other industries, [but] it is facing the world’s elite hackers, composed of organized crime syndicates and motivated nation-states.”
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