What is digital banking?
Digital banking is a type of virtual banking operation that provides end-users with multiple banking services over the internet. Various banking services are available in digital banking systems, namely loan management, bill payment, cash deposits, cash withdrawal, cash transfer, account services, and account management.
The digital banking system consists of several middleware software solutions which connect the database or operating system to other applications. The financial organization and banks adapt to the latest trends in technology to tackle the various changes occurring in digital banking security services.
Digital banking security system
The digital banking security system is a defensive technique practiced by banking staff to protect customer data from cyber-attacks. Understanding security threats in the banking system is essential to cope with security risks, as every digital security attack focuses on a particular set of information to compromise or violate the privacy of end-users.
Cyber-criminals attempt various types of attacks on the digital banking system, such as infiltrating the customer's bank account or redirecting the customers to fake websites to steal their credentials. Digital banking security teams need to pro-actively investigate and consider active security measures to protect end-users from being the victim of cyber-attacks.
Types of digital banking security attacks
User credential attacks: Cybercriminals gain user credentials through engaging various malware or malicious software. Password-stealing Ware (PSW) is malware that cyber-criminals use to collect user data directly from the web browser. The password-stealing ware steals sensitive data such as user credentials, saved card details, auto-fill data, and other financial information of the users.
Various other malware like PSW is designed to steal other essential banking data security information.
Channel breaking attacks: These attacks involve manipulating the user data during the communication between the user and the bank. One such attack is known as eavesdropping. The attackers develop an independent connection with the victims, send messages and finally trick them into believing that the link is private and safe to communicate. Later the attacker collects the information transferred between the two victims.
Pharming: Pharming is a type of phishing attack that cyber-criminals use in digital banking security attacks. The attackers inject malicious code into the user’s machine. The process of injecting malicious code is called DNS cash poisoning. In pharming attacks, end-users observe the proper URL in the browser as the user network is identified; the cyber-criminals then redirect it.
Man in the Browser: This attack harms the end-user browser with malware, referred to as Trojan, to modify the user transaction without questioning the end-users. The man in the browser targets the users when they initiate the transactions and then edits the information such as the destination bank account number or the amount transferred. The criminals not only modify the bank server response to manipulate the end-user but also block them from noticing the changes that occurred during the transactions.
Mobile Malware: Most end-users generally prefer mobile phones in the digital banking system. Mobile malware is used by cyber-criminals to monitor data transmitted through mobile phones to bank servers. The mobile malware can read the user’s SMS messages and send them to the criminal’s command and control servers. This, in turn, enables the cyber-criminals to steal the OTP sent by the banks through SMS to authenticate transactions and logins. With this feature, attackers can use the victim’s mobile banking accounts.
Furthermore, the criminals in mobile malware attacks use social engineering techniques to convince end-users to install malware applications. The mobile malware in the digital banking system can steal contacts, disable the mobile banking security software, install malicious apps, and replace legitimate banking system application security with fake services.
Security measures used in the digital banking system
- Digital Certificates: Digital certificates are used in the digital banking system to authenticate both users and banking systems. It aids users in transferring data securely through the internet with the help of public-key infrastructure (PKI). They are also called public-key certificates or identity certificates.
- One Time Password token: Users in various random situations request one-time password (OTP) tokens. The dual authentication method generally uses OTP tokens. The OTP generated is valid only for the one login session or transaction on the digital devices used for digital banking.
- Browser protection: Browser protection secures internet browser communications. The memory area of the browser monitors against the malware. The browser protection detects the malware and stops capturing sensitive information and credential theft.
- Virtual keyboard: It is developed to hinder the active use of malicious key loggers in physical keyboards, which capture user data and use it to launch further attacks. Virtual keyboards can replace physical keyboards effectively.
- Device identification: device identification is a standalone solution in the digital banking system which primarily aims to facilitate user access.
Advanced layered security for e-banking
The layered security system provides multi-layered protection for e-banking technologies. Digital banking or e-banking technologies used in banks and financial organizations utilize the layered security system to protect themselves from cyber-criminal activities. The layered security system uses different control systems at various steps of transactions. Therefore, the strength of one security policy compensates for the weakness of other security policies.
Banks engage the layered defense techniques against cyber-attacks. Once a defense layer is avoided or passed by the cyber-criminals, another layer of defense protects the digital banking systems. The cyber-criminals craft several methods to decode the layered security system.
The layered security system in e-banking creates a defense system that not just detects the cyber attackers, but also provides a strong defense against the attackers by spoiling their attacks and blocking them from entering the banking security system. The layered security system improves the banking security policies and destroys the attempt of cyber-criminals trying to breach the digital banking security system.
Various layered security systems used in e-banking
Fraud detection and monitoring system: Banks typically use fraud detection software to detect attacks across multiple channels against cyber-attacks that may include forging checks or using duplicate credit cards. The process of fraud detection and monitoring is based on customer behavior and history.
Dual authentication: Dual customer authentication is a security system used in the digital banking system. Typically, double authentication techniques usually require two people to complete a single transaction as changes made by one of the administrators will be considered only after the approval of another administrator. The dual authorization techniques are enabled by default and hence require permission from both the administrators to disable them. This technology prohibits attackers from using stolen credentials.
Positive pay: Positive pay is an automated fraud detection technique used in digital banking. The cash management department usually employs positive pay techniques in layered security systems. The positive pay services match the check number, account number, and amount present in the check. All three credentials should match precisely in positive pay for the transaction to take place.
Debit block. One of the common online banking system security risks is unauthorized electronic charges. The debit block is a security policy used against cyber-criminals in the layered security system to avoid these charges. It protects the user's account as it offers permission to block the transactions based on specified criteria. The online banking system provides the names of the blocked sites and allows the users to change the rules used to prevent unauthorized sites. The debit block technology limits the transactions.
Out-of-band verification: Out-of-band technology is a two-way authentication technique used in the layered security system. It requires a secondary verification method along with the ID and password authentication. The organization that requires high-security uses out-of-band authentication techniques that are best suited for communications outside the current methods and are generally used for verifying the transaction process.
Transaction value thresholds: the threshold value defines the maximum amount allowed per transaction and the number of transactions that are allowed per day. If the transaction exceeds the assigned limit, the transactions get canceled. The transaction value threshold does not affect the existing card limits.
Internet Protocol (IP) reputation-based tools: the IP security-based tools help the e-banking security system by blocking the connection of the susceptible or known IP addresses that are associated with fraudulent activities. The IP reputation services provide reputation scores for every IP address that is used by banking organizations. The reputation scores operate as a signal in a fraud risk scoring system.
Internal controls: Internal control refers to the system procedures, policies, and processes that are implemented by the board and the management. Internal control protects the assets of the bank that control or limits the risks. The active internal control system detects or prevents mistakes, noncompliance, or potential fraud with the help of bank policies. The internal and external audit programs conducted help to discover the faults in the internal control security system.
Various defense technologies are introduced by the banking security staff to prevent cyber-attacks. Sophisticated encryption protocols are used by banks to establish security channels against man-in-the-middle attacks. When cyber-criminals attack the user credentials to achieve sensitive banking information, banks introduce layered protection or multi-factor authentication techniques. The encryption of sensitive data is employed to protect the bank database from hackers if cyber-criminals hack the bank's database.
Uses of layered security in e-banking or digital banking systems
The users communicate with the bank using various digital appliances such as laptops, smartphones, and tablets. A layered security system in e-banking or digital banking system provides the necessary protection needed. It stops cyber-criminals from stealing sensitive data or from conducting fraudulent transactions.
Maintains customer loyalty with the help of improved security
The layered financial security system at banks provides a smooth and comfortable user experience to secure customer loyalty and manage customer relationships.
Builds customer confidence with advanced security technology
Cyber-criminals target the digital banking system with various fraudulent methods. Layered security systems are introduced in the e-banking system to protect the e-banking system from attacks like card skimming, shimming attacks, and multiple malware attacks while ensuring the simplicity of usage to the end customers.
Mitigates the risks with the banking regulatory agreements
The banks follow various policies and procedures to ensure the security of customers’ data. The layered security system provides secure authentication and transaction signing processes, which helps the banking security staff to mitigate the risks present in the banking system.
About NST Cyber
NST Cyber is an emerging leader in the cyber threat management space. NST Cyber as we provide a portfolio of security assessment, cyber security testing services, control validation, defensive, and detective security advisory to Enterprises. NST Cyber collaborates with several business verticals like banking and finance, oil and gas, retail, manufacturing, and healthcare to assess their current security posture and continuously improve resilience against targeted cyber-attacks. NST Cyber assists several esteemed banks and FinServ companies in improving Enterprise-wide security posture and meeting compliance requirements from regulators.
For more information, contact us at email@example.com or visit our service page.