COVID-19 Increases Financial ThreatsBy Gabriela Mastache | Tue, 05/19/2020 - 11:31
The COVID-19 pandemic has not only created sanitary and economic stress on the world, but also is creating the perfect ground for an increase in cyber financial crimes, says a new publication by the Financial Stability Institute.
According to the publication, the COVID-19 lockdown has increased cyber vulnerabilities of financial systems, given that around 300 million office workers at a global level are currently working from home, including banking and insurance workers. The problem is that these workers log into their companies’ sites using non-public data online, which has become susceptible for criminals. “Work-from-home arrangements with remote access to corporate networks have significantly expanded the attack surface for cyber criminals,” says the report.
Financial threats as a result of the COVID-19 pandemic have even raised the alarms of the International Criminal Police Organization (Interpol) which has recently issued warnings to its 194 member countries regarding “a marked increase of cyber threats connected with malicious domains, malware and ransomware.” Moreover, they mention that COVID-19-related crime can include “increased misuse of online financial services and virtual assets to move and conceal illicit funds and possible corruption connected with governmental stimulus funds or international financial assistance.”
According to the cyber security firm Carbon Black, in March 2020 ransomware attacks increased 148 percent compared to February 2020, being the financial sector the primary target of these attacks.
Moreover, social-distancing measures have reduced, up to a point, security protocols for financial institutions, since they now have to engage in remote identity verification. “This could create potential loopholes for money launderers, especially in cases where financial institutions may not be fully equipped to verify the identity of customers remotely. The need to devote additional resources to ensuring the effective operation of business continuity arrangements may mean that financial institutions are less able to monitor suspicious transactions.”
Though the Interpol has already published international guidelines regarding how to handle the current threats, experts believe that authorities need to create awareness of these threats through public statements. The publication mentions that the New York State Department of Financial Services has already done this, highlighting the importance of using secure VPN connections to encrypt data in transit, using multi-factor authentication protocols and updating them for key transactions, apply strong security protocols to personal or home devices, as well as taking measures to prevent the loss of non-public data.
This is not the first time that a warning to financial services is raised in the current COVID-19 lockdown. The Group for Financial International Action (GAFI) published a few weeks ago that the current COVID-19 pandemic has increased money laundering threats, as well as the Unit of Financial Intelligence (UIF).