A hacker is an individual skilled in computer programming and security who seeks to exploit vulnerabilities in systems or networks for ethical or malicious purposes. Some hackers choose to use their skills to commit crimes, such as bringing down an enterprise’s network, stealing peoples’ identities, or emptying their victims’ bank accounts.
There are many different types of hackers, including ethical hackers, cybercriminals, script kiddies (hackers who use pre-made scripts to hack systems or accounts), hacktivists (who use their skills to support social activism), plus the grey, red, blue, and black hat hackers (who engage in different levels of unethical hacking practices).
Hackers are always looking for new ways to exploit weaknesses in technology and people (manipulating them through social engineering schemes). Hacks or cyberattacks can include phishing, brute force attacks, social engineering, viruses and malicious code, denial of service attacks, or a Structured Query Language (SQL) injection.
How does hacking work?
If we examine how hacking works, one avenue is through exploiting cybersecurity defenses. While cybercriminals use their technical skills to hack into systems or bank accounts to steal information or funds, for instance, ethical hackers use the same skills to test companies’ networks for security weaknesses so they can improve their defenses. The other route some hackers pursue is manipulating individuals into taking actions they typically wouldn’t such as sharing their banking login credentials with someone posing as an authority figure.
How can banks defend themselves from hackers?
Financial institutions can protect themselves and their customers from hackers by keeping their technology and software up-to-date, educating customers about cyberattacks, and implementing modern authentication measures that verify their customers’ identities and spot suspicious activities in real-time.
Example:
A credit union (CU) implements a new instant payment app. Shortly after that, hackers take advantage of a weakness in the new app’s security, hacking the solution and defrauding the CU’s members that make payments with the app.