With great advancements in information technology, cyberspaces are the easy target for cybercriminals to commit crimes. While the digitization of connectivity and transactions offers great benefits to banking customers and employees, the Banking, Financial Services and Insurance (BFSI) is most prone to cyberattacks. Artificial Intelligence techniques can help to mitigate the risk of cyberattacks in the BFSI sector significantly. Automated AI platforms help maintain data privacy, fraud identification, and a high level of cybersecurity.
Why is the BFSI an easy target for cyberattacks?
A CIO Magazine report states that the BFSI companies have continued to be the main target of cybercriminals over the last few years and this trend is likely to continue.
As banking systems are getting complicated, security breaches are also on the rise. Organized attacks and high-tech online heists on banking systems are causing losses of millions of dollars. Who do attackers target the BFSI for cybercrimes?
► Customer data is invaluable to cybercriminals and the banking sector mainly deals with this information. Hackers target banks and financial institutions to steal customer data and misuse it. In 2017, cyber attackers hacked millions of customer records of the global credit agency, Equifax resulting in large-scale data and security breaches.
► Since financial institutions are a vital part of the economy, they are more likely to pay a ransom to pursue their operations after a hacker attack or ransomware.
► The size of the financial institutions does not influence the attacks. Cybercriminals can monetize several attacks on small institutions, while larger institutions offer more scope for attack due to their huge volume of customer data.
► Digital technology has taken over the world by storm, including the banking sector. All banks have apps for customers to perform all operations. Due to fluctuating customer demands, the apps are constantly updated. This constant tweaking of apps exposes the flaws in the apps’ security system.
How can AI mitigate the risk of cybercrimes?
An effective security system that can automatically adapt to cybercriminals’ activities is the solution to combat any level of cybercrime in the BFSI. Building such an adaptive system is possible only with AI technology. AI-based technologies can aid the BFSI sector in the following manner:
Compliance and Regulation
Typically, the bank’s compliance team does the job of going over the compliance document elaborately and deciding what is applicable for the organization. With Artificial Intelligence, the compliance team can leverage the abilities of AI to stay up to date with the latest compliance and regulation documents. AI can take over all the heavy work going through the documents, examining and analyzing the best possible solution, and modifying it as needed.
The fraud detection feature of AI tools collects all the customer data online and ensures that the banking activities align with the user profiles. This data is then compared with the organization’s internal data records to detect anomalies. AI tools can help achieve fraud detection in real-time and reduce the occurrence of false flags. Users can no longer get locked out of a bank when they swipe their cards from a remote location. AI-powered technology allows banks to track the geolocation, transaction history, and other activities of the user.
AI-powered software performs predictive analysis to identify potential breaches in the BFSI system. This method is more effective and quicker than those detected by the human eye. The software can accurately estimate the location and time of the potential cybercrime. Accurate detection can reinforce the defense system by concentrating on areas vulnerable to high-risk attacks.
Make-up for Security Shortage
According to a report by CSO, over 50% of respondents of various organizations claimed that their security system was severely lacking in cybersecurity measures. AI can help tackle this alarming shortage by amplifying the security checks in the system. It can automatically scan the data for inconsistencies and find potential threats.
AI tools can scan millions of records within minutes, much faster than human speed. According to Phys.org, machine learning tools have been able to detect and save several BFSI systems from ransomware attacks that were missed by traditional anti-virus software and other systems.
For AI systems to successfully implement security in the systems, the teams must provide regular feedback that can enable the addition of new features and enhancement of predictive abilities of the cybersecurity system.
The time and efforts invested by the BFSI sector in training the AI-powered systems will pay off by achieving superior monitoring and predictive capabilities. False alerts can be greatly reduced and real security threats in the system can be detected. The flip side here is that cybercriminals are misusing AI to bypass security. The only way to prevent this threat is to manage a multi-layered, robust security strategy that will encompass AI solutions and technically trained staff to implement it.