Cyber Attacks on Banks: Is Your Money Safe?

cyber attacks on US banksWe’ve all seen the summer blockbuster movies about cyber-attacks on banks, governments, and other financial institutions—but is fiction beginning to hit too close to reality? The answer is a resounding yes, based on the cyber-attack examples we’ll cover later in this article.

So is your money still safe? Should you begin looking at other financial options to protect your assets, savings, and financial resources?

While you don’t need to run out to the bank and start withdrawing funds, there are some simple steps that you can—and should—take to ensure that everything’s as safe and secure as it can be. Though the greater risk when it comes to cyber-attacks is the hacking of your credit card company (rather than your checking or savings account), it’s still important to protect yourself.

The following recent examples of cyber-attacks on banks demonstrate just how critical this is:

6 U.S. Banks Struck

In September, 2012, a group of cyber hackers who hailed from Iran attacked six of the largest financial institutions in the United States. While money wasn’t stolen during this attack, the banks’ websites were blacked out, leading to customers being unable to access their accounts online or do any kind of online banking.

One of the major concerns for customers of these banks was that they didn’t know what was going on. In fact, customers’ major complaint was that the banking institutions didn’t properly inform them of the attacks. This highlighted the potential for panic if customers are not kept in the loop about what’s happening.

The hackers in this case used a form of cyber-attacking known as ‘denial of service.’ It’s not a sophisticated attack and basically works by flooding the website with traffic so that it becomes overwhelmed and shuts down. Website servers can only handle a specific amount of web traffic at any time and when these limits are exceeded, the sites in question go down.

As noted, this attack had nothing to do with going after customer accounts or trying to steal money—it was actually conducted in retaliation for a video that was posted online making fun of Islam’s prophet, Mohammed. In exchange, the attackers claimed that the attacks would continue until the video was removed.

While the financial institutions didn’t have anything to do with the video, they are high profile targets. When customers feel that they are susceptible to attacks, it could lead to a run on funds, which could ultimately take down the financial sector.

This is an example of what’s known as a nuisance style attack, but don’t let the relatively small impact of this particular situation assuage your concerns. There are growing fears that a similar type of attack on the U.S. stock market could have a crippling effect on the overall economy in the U.S. and, subsequently, abroad.

$45 Million Stolen

Arguably the largest bank robbery in history wasn’t carried out in a bloody heist, an armored car robbery, or a sophisticated “Ocean’s 11” style hit on a casino. It was carried out in an amazing display of precision and organization that involved hundreds of men and women across the world working together.

Seven of those involved were captured in New York and await trial while the rest plot their next strike.

In this scheme, a set of wealthy backers paid hackers to break into financial systems and gain access to the PIN numbers of their customers.

While doing so, they also removed the withdrawal limits for these accounts so that an unlimited amount of money could be drawn against them. From there, PIN data and other pieces of information were passed off to the ‘cashers,’ who would go from one ATM to the next withdrawing as much money as the ATM could generate.

Within two hours, about a dozen ‘cashers’ moved up Broadway in New York City and withdrew $2.8 million. Authorities are calling this an ‘unlimited operation,’ representing one of the most advanced schemes ever created to steal money from banks and their customers.

Is Your Money Safe?

These attacks, while completely different in nature from one another, highlight an ongoing threat to financial institutions of any size. While some banks and other organizations actively seek to hire experienced hackers to attempt to break through their firewalls, some continue to rely on the ingenuity of their in-house staff.

This could mean limited insight into how outside hackers could gain access and steal money from their customers. So, the most important factor to consider here is whether or not your money is actually safe in your current bank.

In the United States, the federal government insures deposits up to $250,000. That means that if anything happened to your bank—for example, if it undergoes a run on its available funds and goes out of business—your money is insured; you will not lose your savings.

The same holds true if a hacker breaks into your bank’s central computers, gains access to your personal PIN or other account information, and steals all of your money. The insurance amount is limited to $250,000, though, so if you happen to have more than that in checking or savings, you’ll want to consider other options for the excess amounts.

The problem with cyber-attacks on banks is that they’re intended to do one of two things. They aren’t just intended to steal money—they may also be an attempt to undermine public confidence in the banks.  This could then cause customers to withdraw their money or move it elsewhere to potentially less secure locations.

How to Protect Your Money

Fortunately, there are steps that any person can take that can help to protect the money they have in financial accounts.

  • Keep a close eye on your accounts and report any suspicious activity you encounter as soon as possible.
  • Change your ATM pin number frequently, using seemingly random numbers—not birthdates or numbers that are personally significant.
  • Never access your account information from a public wireless access point.
  • Install a VPN client on your device and use the VPN (Virtual Private Network) service whenever possible to ensure that your personal information is secure when you’re working online.

Finally, keep a level head about the threat of cyber-attacks. The last thing anyone should do is play into the hand of hackers and thieves and hide money “under the mattress.” Not only will you lose out on the accumulation of interest, your money becomes completely vulnerable at that point. Keep a close eye on your money, be smart, and don’t give into fear.

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