How Covid-19 has increased the pressure on banks to combat cyber frauds?2 min read . Updated: 14 Oct 2020, 08:21 AM IST
- While the digital financial space has seen significant growth, the number of fraud cases have also seen a rise
- Kiran Shetty, CEO & Regional Head – India & South Asia, SWIFT said that the pandemic has increased the pressure on the banking industry to combat cyber frauds
The threat of cybercrime on the global banking and financial services industry has increased amid the coronavirus pandemic. From hacking individual bank accounts to that of companies or even governments, these attacks have become highly targeted. Around 66% of Indian organisations have suffered at least one data breach after shifting to the remote working model, said a global survey by Barracuda Networks.
Phishing, another form of attack led by social engineering, is targeting consumers who may fall prey to a fake but ‘genuine-looking’ bank website, and eventually offer credentials to a hacker. The hacker would then use the credentials and transfer funds fraudulently.
Talking to Mint, Kiran Shetty, CEO & Regional Head – India & South Asia, SWIFT said that the pandemic has increased the pressure on the banking industry to combat cyber frauds. "While the COVID-19 pandemic has accelerated digital transactions and payments, it has also necessitated remote working conditions, thereby making banks and financial institutes more vulnerable to threats. Cyber criminals have been quick to exploit the opportunities presented by these changes as cyber frauds have surged dramatically. With employees working through ‘home network’, vulnerabilities are at its peak and cyber criminals are taking advantage of this opportunity, as phishing emails, trojans embedded in apps and websites and other scams are taking place at breakneck speeds. And attackers are well resourced, constantly evolving their modus operandi and using untraceable money laundering techniques. This has exposed a weak point in security of financial institutions, due to a lack of controls and the use of legacy systems as well as staff training within financial institutions," Kiran Shetty said.
Adoption of e-commerce and digital financial services has seen accelerated growth in the country but the concurrent rise in cyber frauds necessitate multi-level awareness.
Shetty further said that regular and updated staff awareness courses and smart investments in updating or introducing new technology and processes could pay dividends."Compliance teams need to know what red flags to look for and have the right processes in place and tools at their disposal which supports ongoing due diligence by alerting institutions."
"An increasing urgent need for the convergence of anti-money laundering, fraud and cybersecurity processes in FIs. This includes more information sharing, tightening due diligence requirements and investing in maintaining systems to strengthen your defences."
Digital payments have been on an accelerated growth path over the last several years, with NPCI's UPI alone clocking 1.49 billion in volume and USD 41 billion in transaction value in July 2020. While the digital financial space has seen significant growth, the number of fraud cases have also seen a rise with fraudulent claims, chargebacks, fake buyer accounts, promotion/coupon abuse, account takeover, identity theft, card detail theft and triangulation frauds emerging as challenges, a report by Data Security Council of India (DSCI) and PayPal India has suggested.