The need for cutting-edge technologies for secure banking infrastructure

The need for cutting-edge technologies for secure banking infrastructure

Our lives today are rooted in the digital space. Shopping online is a big part of this. Be it paying bills, booking tickets, shopping online or doing banking transactions; the list is endless. We may assume that all our transactions are inherently safe, but unfortunately, that is far from the truth.

Cybercrime is at an all-time high in India. According to CERT-In, the nodal agency that handles cyber security threats and operates under the Ministry of Information Technology, the first two months of 2022 reported more cyber crimes than the entire 2018 in the country. Incidents of cyber fraud went up from 2,08,456 in 2018 to 14,02,809 cases in 2021. It is definitely a cause for concern given that people on the back of the digital India promise are losing their money. The only way to counter this is for the banking industry to look closely at how they are being defrauded and take immediate yet thoughtful steps to prevent it.

Today, fraudsters are turning to newer technologies to defraud customers. Scams like SIM swapping, fake KYC threats and tricking customers by installing malware, banking password hacks and screen recording attempts are done using the latest technologies available. In order to counter this, banks must turn to cutting-edge technology and ensure customers’ security. The need of the hour is to hire cyber security firms that know exactly how fraudsters operate. These firms spend time and resources inventing new technology to ensure security in the banking sector.

Banks that do not take security seriously put many things at risk, including reputation, customer trust and finances. At the macro level, it also hurts the economy as lakhs of crores are siphoned off, never to come back into the system. In addition, with banking processes becoming increasingly complex, banking systems are even more vulnerable. A recent report by the Reserve Bank of India revealed that a staggering 60,414 crores were lost to bank fraud. It’s not that people aren’t tech savvy. Millennials (aged 24-37) were the most targeted group to fall victim to tech support scams. This clearly shows that it is not always up to the bank’s customers to take care of themselves. It is primarily banks and financial institutions that must ensure that they use the best and most cutting-edge technology solutions available to protect their customers.

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The type of bank fraud we are witnessing today is as diverse in nature as it is dangerous. The most common of them, but still quite damaging, is when a customer’s password is hacked. Mobile phones are quite vulnerable to all kinds of attacks given that a large number of customers transact through their devices. SIM swapping is a scam where a customer’s SIM card is cloned without their knowledge. This scam usually involves large amounts of money being transferred to multiple bank accounts that may not be easy to trace. Keyloggers also attack customers’ bank accounts directly, putting their finances at risk. Social engineering attacks and transaction authorization and account takeover fraud are also serious risks affecting the banking sector. These threats directly affect customers and banks and make a strong case for adopting cutting-edge cyber security measures.

The technologies developed by cyber security firms are highly advanced and can help secure complex transactions; eSignature solutions for private customers help digitize internal as well as consumer-oriented agreement processes with electronic signatures. This helps deliver better experiences to both employees and customers. There is also passwordless authentication that frees customers from relying on passwords and makes it easy for them to do business with the bank.

Account takeover fraud can be countered by using a multi-layered security approach provided by cyber security firms. Man-in-the-middle attacks can also be avoided by using out-of-band authentication options that include easy-to-use SMS and push along with visual cryptogram technology to authenticate transactions. Cybersecurity firms can help banks meet the ever-changing compliance requirements. Bank transactions can be defended using transaction signing services which are extremely effective in preventing social engineering attacks. These are just a few of the important, sophisticated methods to beat fraudsters at their own game.

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Ultimately, it is the bank’s responsibility to not only provide security, but also a simple, user-friendly experience, and technology can enable that quite effectively. There is no reason why fraudsters cannot be defeated and the banking infrastructure strengthened by using the right technology solution.

The article is written by Pinakin Dave, Country Manager – India & SAARC, OneSpan Inc. He is a cyber security expert who works with international organizations protecting banks worldwide from serious cyber fraud.

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