Online Platforms for Social Interaction Owned by Criminals as a Haven for Financial Deception
In the digital age, social media has become an integral part of our lives, and this extends to the banking sector as well. However, the use of social media in banking comes with its own set of risks, as highlighted by the Commodity Futures Trading Commission (CFTC).
One of the primary concerns is the increased risk of cyber attacks. The potential exposure of sensitive company data through social media platforms can make banks vulnerable to hackers. Organizations are encouraged to invest in employee training to raise awareness of these risks and adopt a position of sensible caution.
Hackers have devised clever methods to infiltrate systems. For instance, they can impersonate legitimate suppliers by spoofing vendor emails, making it difficult to distinguish the perpetrator's email address from the legitimate one. Similarly, they can impersonate senior executives (CFO, controller, or CEO) and issue communications directing lower-level employees to urgently execute financial transactions to fraudster's accounts.
The scheme using impersonated emails is usually detected only when employees are asked to verify the transaction, with an average dollar loss per victim being approximately $55,000.
Another worrying trend is the use of social media for brand hijacking. Hackers can misuse company logos and website content, deceiving unsuspecting visitors into divulging personal information. This not only poses a threat to customer loyalty but also could cost countless dollars.
However, it's not all doom and gloom. Measures can be taken to mitigate these risks. Monitoring user behavior and applications on corporate networks can help detect potential takeovers of social media accounts and identify suspicious activity early. Organizations using social media banking that are particularly at risk from hackers include those relying on cloud services, where attackers use social engineering to gain privileged access.
The CFTC recommends risk mitigation measures like configuring alerts for password resets on privileged accounts, monitoring newly registered or changed multi-factor authentication methods, detecting multiple failed logins before successful resets, and being vigilant for signs of MFA fatigue, with all unusual events subject to security team review.
Employees too have a role to play. They should seek confirmation of the legitimacy of inquiries originating from LinkedIn by directly contacting the individual's purported employer.
Despite these challenges, the benefits of social media banking are evident. Banks in countries like Turkey and India are leveraging platforms like Facebook and multi-social payment apps for customer engagement and service offerings. DenizBank offers customers access to their accounts via Facebook, and Kotak Mahindra Bank launched Kaypay for social media money transfers.
As the world continues to embrace digital transformation, it's crucial for financial institutions to strike a balance between leveraging the benefits of social media and managing the associated risks effectively.
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