Independent Banker | Tackling Familiar Cyber Threats with Smarter Tools
By Jen A. Miller
Auburn Bank prides itself on being a locally minded institution. The $977 million-asset community bank has clients in every state and even internationally, but its focus is on Auburn, Alabama, says Jerry Siegel, senior vice president and chief technology officer.
The community bank has worked hard to build a good reputation within the community, which is why Siegel also knows that if there’s ever a data breach, it won’t just be a blip of a news story. It could put the whole bank at risk.
“We’re in a small town,” he says. “A breach would be more detrimental to us and our customer reputation than if it would be at a larger institution.”
Community banks have built their reputation on trust, which can be damaged by a successful cybersecurity attack.
A study from Vercara found 66% of U.S. consumers would not trust a company that has a data breach, and 44% attribute such events to a company’s inability to take proper security measures. Plus, such breaches are expensive, averaging $4.88 million, according to IBM.
But community banks are well attuned to how to protect their operations, employees, customers and data from these kinds of threats, despite the ever-changing nature of cyber threats.
Here’s a look at the cybersecurity threats community banks are addressing today and how banks are empowering both their staff and their customers to guard against cybercrime.
Classic scams abound
The most common cyber threats community banks face today are not new, says Mike Manske, director of cybersecurity consulting at West Monroe, a global business and technology consulting firm.
Ransomware, in which criminals use malware to gum up an organization’s operating system and then demand money to unstick things, remains at large.
Phishing attacks are still out there, too, aiming to take over business email accounts, and hackers will trick employees into giving them their credentials so they can break into an organization’s software system.
Business email compromise (BEC) is another “classic” cybercrime vehicle. BEC is when a bad actor prompts someone to click on a link that brings them into a system, or spoofs an email or text that tricks someone into turning over their login and password.
“Business email compromises have been out there forever,” Manske notes.
To complicate matters, all these methods can be connected: Phishing attacks are often how malware is injected into a system, leading to a payment demand.
The importance of a cyber incident response plan
Community banks should have an incident response plan and run through what they would do in the case of a breach, a natural disaster or anything else that might interrupt business operations, says Mike Manske, director of cybersecurity consulting at West Monroe, a global business and technology consulting firm.
“Do you have the right action plan in place? Have you tested it? Have you done tabletop exercises? What is the business continuity plan?” he says. “Putting those plans in place and then making sure those plans work does become very helpful when there is an incident.”
Plan updates and testing need to be ongoing, because attacks, software and people change. “Sometimes it’s overlooked, because they’ve been done in the past, but continuing to mature capabilities is a key component” of such exercises, Manske says.
Community bankers can stay up to date on current threats by speaking to their peers to see what they’re facing, as well as learning about evolving risks through ICBA’s Cyber & Data Security page and FS-ISAC’s weekly risk summary reports.
Tools to stop online and offline fraud
While the basic schemes are the same, technology is helping the bad actors get better at them.
With generative AI, “there are no more misspellings,” says Manske. “There are deep fakes. All of this stuff makes it a lot harder for someone to pick up that it’s fake.”
AI isn’t just being used by the bad guys, though. Attackers might be using it to get faster and evolve and adapt, but cybersecurity professionals are also using it to bolster their defenses. While each bank might not be building AI-enabled protections from the ground up, you “want to be a fast follower,” Manske says.
Community banks are doing just that, whether it’s through partnering with new vendors or working with vendors they already have.
Threat detection and real-time software monitoring continue to be powerful tools in identifying fraud attempts, says Terri Luttrell, compliance and engagement director at banking software company Abrigo.
A tool’s built-in AI will flag something it sees trying to break into the system, odd patterns of employee behavior or changes from how a customer normally banks. The software can then let a security team member know something is potentially off and they can act accordingly.
These detection tools can also alert community bankers when a customer is potentially being scammed, whether that’s by romance scams or “pig butchering” scams, where fraudsters gain trust with victims over time, then lead them to investing in fake cryptocurrency assets or other fake “opportunities.”
Software can look for those unusual banking patterns, such as when someone who has never sent a wire transfer suddenly does so. While a banker can’t stop someone from sending the money, detecting these kinds of patterns is an opportunity to reach out to the customer and, when appropriate, share resources from law enforcement about such scams, Luttrell says.
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To see the full article, visit Independent Banker, “Tackling Familiar Cyber Threats with Smarter Tools.”
