Weekly Wrap: Banks are targets for ransomware hackers

In this week’s episode of “The Buzz,” Bank Automation News explores the threat of ransomware attacks on financial institutions . Banks are facing the growing cybersecurity threat that shut down the Colonial Pipeline last week and the BAN team discusses how banks can avoid falling victim to similar attacks by ransomware hackers. In other news, emergent use cases for robot process automation (RPA) are cropping up that involve combining RPA with advanced technologies like artificial intelligence and machine learning. Banks are leveraging these tools to automate loan collections and fraud detection. Find a discussion of these topics and more in today’s episode of the Weekly Wrap with Publisher JJ Hornblass and Associate Editors Jaspreet Kalra and Loraine Lawson for the week ended May 14, 2021. Subscribe to The Buzz Podcast on iTunes , Spotify , or download the episode .

The following is a transcript generated by AI technology that has been lightly edited but still contains errors. JJ Hornblass Hi, everyone. I'm JJ Hornblass. Welcome to this episode of the Buzz from Bank Automation News, where we chart the future of banking automation technology. This is our Weekly Wrap for what's happening in the industry for May 14, 2014. First, we thank our advertisers, Ailleron, MX and Narmi for their support, so thank you to them and so pleased to be joined by Loraine Lawson and Jaspreet Kalra of the Bank Automation News editorial team. Hello to both of you. First, some general technology news Foxconn reported earnings last quarter of $1 billion on revenue of $48 billion. And this revenue number was up 45% on a year over year basis. Although it added that the global supply crunch will continue to worsen. This quarter meaning chip supply, coin base report reported q1 earnings revenue excuse me a $1.8 billion. And that's up 207% on a quarter over quarter basis, monthly transacting users at coin base hit 6.1 million, and that was up 2.8 million in the quarter alone. And the company also announced importantly that it was going to list Dogecoin in six to eight weeks. Lorraine and Jaspreet. Take notice. And along those lines, there's new data that has surfaced that that indicates 46 million consumers plan to use cryptocurrency to pay merchants. I assume that it pred is predicated on the cryptocurrency values remaining at their current levels and not declining in banking, automation industry news. The technology sector was certainly wrapped up in news from colonial pipeline, that it was the subject of a ransomware attack that shut down its gas pipeline on the East Coast of the United so along the east coast of the United States. Jaspreet. Let's start by giving some some background on that. On that ransomware attack. And then what are the implications for financial institutions? Right. SoJaspreet Kalra the first reports that emerged about the colonial pipeline being hit was late on Friday evening, when we realized that colonial had to shut down operations because it couldn't access some of its data repositories that helped run the pipeline, then put sort of started rippling off into the rest of the week was playing out what happens when any sort of infrastructure facility or any other service provider gets hit with a cyber attack. At the one end you have disruption of services. But on the other end, everyone starts thinking about cybersecurity a lot more in that weekend, which is exactly what happened with other institutions as well. Now the group that attacked the colonial gas pipeline called dark side has also in the past, attacked financial institutions and insurance carriers. So the data that was released by a dark Web Intelligence platform called dark tracer revealed that oak Valley Community Bank was hitting February as well, while they didn't respond to our request for a comment on this, but it clearly shows how software vulnerabilities especially you know, industry that is so data driven and relies so much upon, you know, just records to make its decisions. restricting that access to data can have reputational hit on an institution and secondary disrupt services for a continued period of time. And the sort of across the board inputs that I heard from sources on how to prevent or how to sort of guard against this is rigorous testing, and making sure that all your software is patched. And those are the two basic things because in the past, we've had massive hacks just because a VPN application hadn't been updated or patched and still had vulnerabilities. So I think cybersecurity yet again is at the center of attention yet again. And as we saw with the white house as well, Joe Biden signed an executive order just to sort of further the conversation around these issues as well. And how can the United States infrastructure facilities as well as private cybersecurity facilities can be better guarded against These are texts that have been growing in number over over the past couple of years and have especially accelerated in the pandemic.JJ Hornblass You mentioned that financial institutions have been attacked and have vulnerabilities. Is there a sense for this scope of that?Jaspreet Kalra Well, I mean, it depends from institution to institution depends on how much they invest in their cybersecurity facilities as well. But a lot of attack vectors also arise out of third party vendors. So you're using a vendor to do your accounts receivable, or you're using a vendor to do some of your digital platform stuff. And if they have a wonder ability that's not been fixed, someone can gain access to your platforms just to that means of connections. Right. And, and I think what sort of stands out with respect to ransomware incidents, especially, is that a lot of them are also never report. Because companies want to keep it on the download. They want to handle their own set of problems themselves. And in a high trust business and a high reliance business like banking, hitting any trust can lead to consumer attrition. So a bunch of factors come into play when companies deal with these issues. In the case that you cited, it is thereJJ Hornblass is a belief that they paid the ransom,Jaspreet Kalra there are no deals on whether they paid the ransom or not, because oak Valley or other other insurance carriers that could get caught hid have not made any statements on the possibility of an attack or whether they were even attacked. The information came through a third party source, which discovered that data from these institutions had been leaked on the dark web, how, how much data was it all the data that was stolen? Those are still things that are open for looking into?JJ Hornblass Right, right. Before we get to our next topic. Lorraine, did you want to add anything on the on this?Loraine Lawson Yeah, you know, the we've heard this before about the patching and, and keeping up with certificates. And that can be automated and outsourced, actually. So there were two small bakes back in March that we reported on who had outsourced it to s. Ei, which was automating some of that work. So there really isn't an excuse for banks to be vulnerable in this way. Even small banks can, you know, get someone to help them handle that.JJ Hornblass Okay, good point. We also had news in the industry about some new robotic Process Automation use cases that banks are deploying. Lorraine, tell us about some of those. And and how pervasive are these are these new initiatives?Loraine Lawson Well, it's interesting, they're starting to combine AI with robotic process automation. And that's that's means that there's more things they're capable of doing. When it comes to automation. One way that banks are automating more new directions are automating and as loan collections. And there are three ways in which they automate that, first of all, coupling it with AI to predict the percentage of clients and which clients specifically are would be at risk of default. So to predict them earlier, before they default. They're using RPA. To reach out to customers to manage repayment or restructure, offer them restructuring options before loan goes into forbearance. And finally, they're leveraging automation technology, to give call center people, all that information when a customer calls up. So that's one way in which they're automating in new ways. They're also seeing more, the experts that I talked to, we're also seeing more automation in fraud prevention, to reduce the false positives, which is a major concern for compliance officers. And one reason we're starting to see that sort of automation is that it's a this is probably early days for it. But is that vendors are starting to embed machine learning models for fraud detection and anti money laundering into their products. So I have a guard at Gartner in November had predicted that we would see use cases evolve based on three trends or three enhancement star pay platforms, embedded machine learning models, integration of process discovery and process mining, which we have covered and cloud delivery.JJ Hornblass The fraud, the fraud applications, is this kind of what you were talking about in terms of, you know, patching automation, or does it go in other directions, Loraine Lawson as I understand it, this is more about detecting transactions that may be fraudulent rather than patching a security, you know, an IT infrastructure, right. JJ Hornblass And how pervasive are some of these new you know, pathways that that Banks are taking Do you have a sense for, you know, the degree to which this is catching on? Loraine Lawson I do not. I would say that we're you know, it's it's just a new use case they're seeing sort of starting to see it probably not widespread adoption yet. Okay. JJ Hornblass All right. I thank you to both of you. What do we have planned on the site for next week? Loraine Lawson Well, we have a look at the nonprofit digital dollar project has a pilot project program to explore designs and uses of US Central Bank digital currency. And we'll also be talking about how to measure but success. JJ Hornblass Okay, good. Thank you so much for joining us, please follow us on Twitter and LinkedIn. And of course, visit us at Bank automation news.com. We appreciate you listening in on our podcast and we'll see you next time. Thanks.

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