Data breaches in the financial sector have become a major concern for businesses and consumers alike. With the increasing reliance on digital transactions and data storage, it has become more important than ever for financial institutions to ensure that their data is secure. Unfortunately, due to the complexity of financial systems and the potential for malicious actors to exploit weaknesses in security protocols, data breaches are becoming more common in this sector. According to American Banker, 79 financial institutions reported data breaches affecting over 1,000 customers in 2022. This figure is likely to increase in the years to come.
Unfortunately, the financial institutions themselves aren’t the only potential target for cyberattacks. While data breaches can affect many customers at once, it is also possible for hackers to target individual users. This is especially common as more hackers use AI-driven strategies to commit cyberattacks.
This article will explore the causes of these data breaches, as well as potential solutions that can be implemented to protect against data breaches.
How Traders Can Mitigate the Risks of Data Breaches and AI-Driven Cyberattacks
Online trading carries with it a certain degree of risk. Cybersecurity is an important factor to consider when engaging in online trading. It is essential for traders to be aware of the potential risks and take steps to mitigate them. This article will discuss the various cybersecurity risks associated with online trading and provide strategies for reducing these risks. We will also look at some of the use cases of AI-based tools that can help traders protect their data and investments from malicious actors. It is more important than ever to take the right precautions as more hackers are leveraging AI to take advantage of their victims, as this article from CNBC pointed out last September.
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Online trading has become a paramount part of the investment world. However, it is every trader’s right to know that the convenience of online trading comes with several risks of cyber threats. Therefore, traders must understand the need for secure platforms to take all necessary precautions to protect their investments. In this article, we’ll explore the importance of security in online trading and highlight some examples of secure trading platforms and ultimately help the reader to have the power to thrive over the vulnerabilities where cyber criminals looking to exploit their accounts. You can read this article that we previously covered on preventing cyberattacks.
Phishing Attacks
Needless to say, cyberattacks have become more sophisticated and internationally targeted in recent years, affecting financial institutions and traders worldwide. To put this in perspective, one of the most significant threats facing traders is phishing attacks, where the attacks come in the form of an email or a message, usually pretending to be from a legitimate financial institution or even a trading platform. The message will most probably contain a link to a fake login page, where the trader enters their login credentials, allowing the hacker to access their account.
One such high-profile example of this type of attack comes from the 2016 hack of the Bangladesh Bank where hackers sent a fake payment instruction to the Federal Reserve Bank of New York, resulting in the transfer of a whopping $81 million to defrauding accounts. Clumsy as it is, the hack was made possible by the hackers obtaining the login credentials of Bangladesh Bank officials through a phishing attack.
In order to prevent phishing attacks, every trader or institution should always double-check the URL of the trading platform they are using and avoid clicking on links in unsolicited emails or messages, and as an additional security measure, traders should enable two-factor authentication (2FA), which requires them to enter an additional code along with their login credentials.
Malware
One other significant threat to traders is malware. And unfortunately, malware can come in many forms, including viruses, Trojan horses, and spyware which is hard for even a little tech-savvy person to detect sometimes. And once installed on a trader’s device, malware will work to collect sensitive information, such as login credentials or personal information, and send it to the hacker.
This type of attack, a big one happened in the 2013 Target breach, where hackers installed malware on Target’s payment processing system, allowing them to steal credit card information from millions of customers. And to prevent malware attacks, traders should always use up-to-date antivirus software and avoid downloading files or software from untrusted sources. Additionally, traders should consider using a secure trading platform, such as the MetaTrader 5 Web Terminal, which is designed to be secure and regularly updated to protect against new threats.
In 2022, it was also reported by researchers that one of such infamous malware, Medusa Android banking Trojan’s infection rates have increased and that more geographic regions are becoming targeted. It is of concern that the malware aims to steal online affected users’ credentials to go on and perform financial fraud. The readers can find the timeline of many such cyber incidents to understand how vulnerable even so-called very strong institutions, banks, and even block-chain private companies were. As a result of these happenings, financial institutions and traders alike should take substantial and robust security measures. Now let’s look at several ways that will aid this matter.
Through Public Wi-Fi networks
Finally, traders should be aware of the risks associated with using public Wi-Fi networks. Public Wi-Fi networks are often unsecured, making them a prime target for hackers looking to intercept data transmitted over the network.
An infamous example of this type of attack is the 2014 JPMorgan Chase breach. In this case, hackers accessed the bank’s network through a compromised employee’s computer connected to a public Wi-Fi network. The breach resulted in the theft of personal information from over 76 million households and 7 million small businesses.
To prevent attacks on public Wi-Fi networks, traders should avoid logging into their accounts or transmitting sensitive information while connected to public Wi-Fi. Instead, traders should use a virtual private network (VPN) to encrypt their data and protect against interception.
Apart from Phishing attacks, Malware attacks, and Ransomware attacks, there are also risks, attacks, and threats such as Distributed denial of service (DDoS) attacks, Insider threats, Weak passwords, Unsecured networks and devices, Social engineering attacks, Third-party security risks which one needs to be afraid of. To prevent them here are some measures which an old or new trader or institution should make mandatory and follow.
Multi-factor authentication
To highlight again, one-way traders can protect themselves is by using secure trading platforms. These platforms offer features such as multi-factor authentication, encryption, and secure login procedures to ensure traders’ accounts remain protected from unauthorized access.
GDPR
Compliance with regulations such as the General Data Protection Regulation (GDPR) is a crucial feature and key characteristic of protected and secure trading platforms. By ensuring that traders’ information is secure, the GDPR minimizes the chances of data breaches by introducing guidelines for handling and storage.
To stay ahead in the game, every trader should also be aware of platforms that offer rich security features like advanced order management and a wide range of technical indicators. Making informed decisions can minimize the risk of losing money if traders take advantage of these features.
Trading online can be tricky, and looking for a reliable online trading platform can be a daunting task but finding the right platform can make all the difference. Take, for instance, the MetaTrader 5 Web Terminal not only does it adhere to GDPR guidelines, but it also offers advanced encryption technology to keep your data safe. And top of that, one can access it from any device, without having to download any software. This Web Terminal, adheres to six principles of security, including the latest encryption technology, data protection, and secure login procedures, with that we can say it is a new standard for online trading and for a thankful portfolio, as it also allows traders to work directly from their browsers.
And that’s not all, It was re-created from scratch, to work even faster; and with market depth and technical indicators, a web terminal makes it easy to make informed decisions and stay ahead of the curve. It’s no wonder why it’s quickly becoming the go-to platform for traders of all levels. Hence, always prioritize security when choosing an online trading platform.
Investors Must Reduce the Risks of Cyberattacks and Data Breaches When Making Trades Online
Traders should prioritize security that is up-to-date when choosing an online trading platform. Traders face significant risks from cyber threats, including phishing attacks, malware, and attacks on public Wi-Fi networks. Cyber threats are a significant risk for traders in the digital age. To protect against these threats, traders should always be vigilant and take steps to secure their accounts, such as using two-factor authentication, up-to-date antivirus software, secure trading platforms and others, and traders should conduct thorough research to find the best platform for their needs. By taking these steps, traders can help protect themselves from cyber-attacks and trade with confidence knowing that their accounts are secure.