The idea of hiding money at home is nothing new. This practice is said to be embraced by those who don't trust banks and who want to keep their cash nearby. The problem is, hiding cash in the home isn't usually safe given the multitude of potential disasters that can strike. Take the experience of Qi Shengli, a 60Y old farmer who lives in a small town in China. Instead of depositing his savings of 20,000 yuan ($3k) in a bank, Shengli divided his bills between two bags, which he buried in the ground within the corner of his bedroom. But when he recently dug that money back up Shengli discovered that termites had eaten a good portion of it. Though bankers were only able to piece together a small portion of his money, all was not lost. News of the situation caught the attention of a Beijing artist, who decided to pay Shengli the original value of his savings in exchange for the termite eaten bills. The artist plans to turn them into a piece of art to demonstrate the danger of storing money at home for China's elderly population in rural areas.
While the likelihood of termites infiltrating the monetary holdings of most banks is pretty much nonexistent, banks are not immune from the idea of feeling overly confident about security practices that are not necessarily impenetrable. A perfect example is the passwords used to secure the individual accounts of customers. According to the findings of a recent study conducted by the University of New Haven's Cyber Forensic Research, more than 33% of major banks have weaker password policies and enforcement practices than the majority of social networking platforms. Specifically, the study discovered that while all banks require users of online banking services to create passwords that contain a mixture of letters and symbols, six of the country's 17 largest banks still use security systems that do not require case sensitive passwords to protect these accounts. By depending on security systems that fail to differentiate between "JoHnDoE123" and "johndoe123," the accounts of individuals who use online services with these banks are significantly easier to hack into than those protected by case sensitive passwords.
While community banks were not included in the study, it should go without saying that the issue is one all banks should be aware of and act to correct if needed. It is critical to be sure password security efforts are strong. Of course, security concerns are by no means limited to password protection.
At the same time online hackers are becoming increasingly aggressive and sophisticated in their efforts to breach the sensitive records businesses store on their customers. These include credit card numbers, to account information and personal details such as social security numbers. Further, a growing number of businesses are beginning to use cloud storage for much of the information they maintain. It turns out, however, that the number of businesses around the world that use encryption to protect customer data is still relatively low, according to a study recently conducted by Ponemon. They found that while roughly 84% of companies in the world's 11 largest economies are gearing up to use cloud storage for data by 2018, only 37% of these same companies are planning to use encryption to secure that data. While this survey was not unique to the banking industry, we figured community banks would still want to know about it, given that it is more than likely your customers will be impacted by the rise in online hacking.
Given the ever increasing sophistication of hackers' efforts, we would totally understand if many of you felt the urge to just climb into a hole to hide away from it all. But, as Qi Shengli learned the hard way, even that tactic may not be foolproof, so taking action on the security front is probably a better approach.