Cyber attack warning: UK banks should be prepared to tackle huge data breach

Cyber Security
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An official at Bank of England (BoE) stated while addressing a UK parliamentary committee that banks would struggle to protect themselves from any state-sponsored cyber attack that could cripple their records over a few months. He said that it is just "a matter of time" before the hackers launch their mission.

Anil Kashyap, a member of the central bank's financial policy committee said the banks' cyber security efforts have mostly concerned about how to prevent service outages, but the authorities don't pay much attention to probable attacks that seek to falsify records or access data illegally.

In addition, he also told the parliamentary committee, "If you wanted to do maximum damage, that is what you would probably do if you were a state actor."

He urged to strengthen the defence system of the banks against such cyber attacks and asked the banks to recognise the need for greater state-wide support for individual institutions.

As per the cybersecurity experts, due to the complexity involved in such data breach, these attacks can cause long term damage to data via malware that can be undetected for weeks and even in several cases for months together. In terms of such cyber-attacks targeting banks, this can trigger the issue of identifying between corrupted and not-compromised records.

Reports claimed that policymakers also warned that banks are mainly concerned about their reputation and individual fate but not about the dangers or systemic risk caused by a cyber attack.

Kashyap said, "I don't really care if bank 'x' is offline for a week, even if it's disastrous for their share price, if the services that they provide, that are critical, can be delivered in some other way."

He mentioned that the trickiest part is it could be the case that "the (bank) board's incentives of what to worry about are misaligned with the general incentives."

The BoE would continue to monitor the market share of big technology companies, who are looking to break into the financial services market following this week's announcement by Facebook about its forthcoming digital currency and payment service for its users, said Kashyap.

In this issue, Bruce McClary, the spokesperson for the National Foundation for Credit Counseling told CNBC: "when you put social media and your wallet into a blender, there could be some problems. First of all, you want to make sure your financial transactions are secure and private."

It should be mentioned that in May, one of the top five cryptocurrency exchanges in the world, Binance, reported that it faced a huge security breach which allowed the hackers steal 7,000 Bitcoins, worth almost $41 million, by using various techniques such as phishing, viruses and other attacks to gain access to a large number of user API keys and 2FA codes among others.