Due to the extreme ease, cost savings, and speed of online and virtual transactions, banks consumers are increasingly preferring online services. Furthermore, financial institutions are presenting consumers with exciting deals in the hopes of increasing the number of cashless transactions due to lower operating costs. That being said, economic institutions’ cyber security initiatives to combat cybercrime are being outpaced by a dynamic technical environment and increased attacker skills.
The financial system’s backbone has been Information Technology. It supports the growing difficulties and banking requirements tremendously. Currently, banks cannot consider introducing financial products in the absence of information technology. Information Technology, on the other hand, has had a negative effect on our financial industry, where crimes such as stealing, hacking, phishing and forgery are perpetrated.
When an individual engages in any type of electronic banking transaction, it is necessary to ensure authentication, identification and verification techniques to deter cyber-crime. The rise of cybercrime and the sophistication of the investigative process necessitate the adoption of adequate steps. In order to combat cyber-crime, it is important to improve stakeholder collaboration.
Cyber-crimes (Computer-crime, Technology-crime and Digital and Virtual Banking-crime) in the 21st century has emerged to be one of the most lethal revengeful weapon that any person can use to threaten or cheat someone. The active Internet users – as per the latest global reports of January 2021 – were around 4.66 billion, and this growth has led to the increase in the chances of a user being trapped in this malicious method of crimes which has been in surge during the past few decades.
Although it is understandable that computers have become an essential part of one’s existence, they have also developed an environment conducive to cyber-crime. Cyber-crimes pose a major challenge in light of the fast-changing environment and the significant contribution of the IT industry. Cybercrime is typically carried out by offenders who have technological skills who can outstrip and think one step ahead of the law in order to gain access to computers and commit crimes (they may be internal and/or external – including staff, customers, cyber attackers and professional hackers).
The economy is among the foundations that determines a country’s development and growth. The banking sector is regarded as the economy’s backbone. We use cash, cheques and demand draughts to conduct our daily business. This pattern, however, has paved the way for a new payment system based on swiping debit or credit cards.
While the banking sector has expanded its services, and aims to provide excellent customer service via innovation, cyber-crime continues to be a problem. Cyber criminals can easily get in touch that is accessible on the Internet. Cyber-crime causes massive monetary losses which are borne not only by customers, but also by banks – affecting a country’s economy. When viruses are produced and spread on other devices, or when sensitive business information is posted on the Internet, non-monetary cybercrime exists. Phishing and pharming are the most popular examples.
Cyber-crime refers to any criminal activity carried out on a computer or over the Internet. In other words, digital misconduct is referred to as cyber-crime where the criminal exercises a number of wrongdoings, such as money transfers and withdrawals via unauthorised access by using the computer or any other electronic devices and the Internet.
To narrow down the landscape in today’s globalised world, the banking industry offers many services to their clients and consumers, such as online banking and credit card services. “Customers can access all types of bank facilities 24 hours a day, including online payment with a debit card, and they can conveniently transact and run their accounts from anywhere in the world using the Internet and cell phones.” As we all know, these services are useful to customers, but they also have a dark side, which includes hackers and robberies.
Cyberc-rime may have long-term consequences on those who are attacked. Cyber attackers carry out cyber threats such as taking out loans, incurring credit, hacking, and so on, which may have devastating effects in the banking business.
The below are the effects:
- Financial loss
- Infringement of confidential information
- Legal consequences
- Exposed to reputation risks
- Operational risks
Once a cyber-attacker is able to gain access into a computer system, they may have access to personal data, including private financial documents from customers, which can be copied or transferred into a small removable device. Since information technology powers the operations of banks, individuals, corporations, government agencies, etc., the insecure storing of confidential data and information processed on their computers presents a serious danger.
All the authorities who use computer systems should remain very careful and cautious in order to safeguard their confidential data and information stored in the computers. Through proper usage of passwords and personal identification numbers (PIN), they can limit the access. Any negligence on their part will facilitate cyber criminals’ easy access to certain devices and records.
Banks use a variety of operating systems for their day-to-day activities; hence, banks must ensure that they have in place ongoing internal control and IT audit systems, otherwise it can result in computerised environment lapses due to the availability of inefficient software and hardware systems.
The author has defined some few critical ways to reduce the danger of cyber-attack within the banking space:
- Every single employee should have their own user account, with a policy requiring password changes in every three months. Employees must not be allowed to download or install unauthorised software.
- All employees must be informed about the dangers of opening or uploading email attachments from unidentified sources. Educate personnel about the importance of not leaking or sharing sensitive information about the institute.
- The IT department of a bank must ensure that a firewall is enabled on every workstation and Internet-connected device in the organisation because firewall blocks all communication from unauthorised sources.
- Banks must use ‘two-factor authentication (2FA)’ apps or physical security keys, and wherever possible, enable 2FA on all online accounts.
- The department would make sure that all PCs’ operating systems receive regular security updates.
- To find out if there is any ransomware or malicious software on the network, anti-spyware and anti-virus software must be installed on all PCs. All passwords and wireless networks must be kept secured and well-protected.
- Banks must employ verification methods, such as dynamic device authentication and web-based transaction verification, as more consumers use mobile devices.
- Customers must receive notifications and automated messages from their banks confirming the validity of their transactions.
- Customers must be given instructions on how to verify the legitimacy of any sources that are asking information of personal accounts. Customers must also be given instructions on how to stay safe when using the bank’s websites.
When an individual engages in any type of electronic banking transaction, it is necessary to ensure authentication, identification, and verification techniques to deter cyber-crime. The rise of cyber-crime and the sophistication of the investigative process necessitate the adoption of adequate steps. In order to combat cyber-crime in the banking space, it is important to improve stakeholder collaboration.
About the author:
Surv. Prof. Forster Kum-Ankama Sarpong is a Real Estate developer for over 20 years and a professor of Financial Science. He is a member of the Board of Directors of Ghana Water Company Limited as well as a member of the Ghana Institution of Surveyors.
Tel. Contact: 0244321960
Email: [email protected]