Security & Fraud

Lawsky Pressures Banks To Adopt Multifactor Authentication

Ben Lawsky banking cybersecurity

"We live in a world where each day we are surprised by something new when it comes to the sophistication and the capabilities of hackers," Benjamin Lawsky, banking and cybersecurity expert, told CNBC on Wednesday (June 1) during an interview for its “Power Lunch” program.

Lawsky, the former superintendent of financial services for the state of New York, explained that a new level of scrutiny and urgency must be brought to the cyberattacks being launched on banks.

"You have groups of hackers around the world who are innovating all day long. All they do is try and figure out ways to disrupt our system. It could be really bad,” he added.

As banks face an ever-increasing threat of attack from cybercriminals around the world, increased pressure to change things may be the only way to see any improvement.

But Lawsky warned these efforts should not be simply political. Both government and private entities need to team up in order to prepare for worst-case scenarios before they actually take place.

He also said financial institutions need to move away from the "terrible system" of using a username-and-password model to safeguard user accounts and financial data, instead advocating for the use of multifactor authentication.

"If you sign onto your bank account and your bank doesn't ask you for a second identifier beyond your password that's randomly generated at that time and sent to your phone, you should be worried. And you should be worried about waking up tomorrow and looking at your bank account and maybe your money's gone," Lawsky cautioned.

His comments come at a time when global banks, as well as their cybersecurity practices (or lack thereof), are receiving increased attention, due in part to a continued surge in data breaches and hacks.

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