Cyber Safe Behaviour In Banking Systems

Discussions over coffee breaks with my team are always enlightening. Last week over coffee, we discussed cybercrime web series and movies streaming on OTT platforms. As the conversations continued, my thoughts started wandering around our Banking systems and Cosmos Bank Cyber-attack 2018. Cybercrimes damage the very ethos of carrying out business at a seamless flow, taking advantage of various transactional options available as technology is progressing at lightning speed. A possible prevention strategy/ approach to such cyber threats could be technological literacy and Cyber-safe behavior. 

In the current era of technological advancements, cyber frauds are prevalent crimes that mutilate the economic backbone.  The main target for cyber frauds is the financial sector and, on the hit list is the banking industry which is most exposed to these crimes.  There is a rapid increase in banking frauds like identity theft, phishing, vishing, smishing, access to debit/credit card details, and UPI/QR code scams. Digitalization of the banking industry globally has also acted as a stimulus to cyber fraud.  

Whatever the nature/size of fraud, it’s always the credibility of banks that is at stake. Detection of such frauds at early stages can help banks save their reputation and the common man’s trust in the economy. Regulators, time and again publish the compliance norms to adhere to create awareness amongst the banking staff members through regular training on cyber safe behavior and frauds would reduce the frequency of such frauds.  

Lately, cyber frauds, especially in the Banking industry, are increasing by multiple-folds every year. Also, the recovery also gets affected as there is a lag of almost 24 months between fraud and detection.  

A robust fraud detection and monitoring system is required. EWS (Early Warning Signals), timely inspections, monitoring and reporting, and proper compliance with norms will ensure the safety of customers’ funds and also instill trust in banking systems’ security.  

The system should time and again monitor and report audit authorities. It is most difficult to monitor and track fraud as the gateways are undetected.  The weaker implementation of the fraud detection system, suspicious activity lack of cyber/fraud awareness and safe technologies would lead to prolonged cases and recovery delays. An incentive scheme to identify fraud can be announced for banking staff members.  

Bank management should strategize on the implementation of cyber security/ crisis policy based on Cybersecurity framework guidelines issued by RBI. The seamless information flow between RBI and banks about cybersecurity events would be one of the preventive measures. 

Strategies to Mitigate fraudulent activities: 

  • Inculcating an anti-fraud attitude as a way of life is a crucial step in any strategy for managing the risk of fraud. 
  • Using historical data for fraud assessment and developing a risk incident response plan to stop similar crimes from happening in the future. 
  • Regular examination and review of the likelihood and implications of various fraud scenarios, as well as an evaluation of the organization’s readiness against such fraud risk, should be the basis of proactive fraud risk evaluation. 
  • To stop future fraud incidents, ongoing monitoring of employs real-time/near-real-time monitoring tools and procedures is essential. 
  • Early fraud identification requires whistleblowing, as well as an effective complaints route and a strategy that guarantees no retaliation against the presenter. 
  • Identifying patterns of fraudulent behaviors that you are already aware of. Banks may use security solutions that are Rule-based assessments and include historical data.
    –  Assessing anomalies that help identify unusual activity that might be a sign of fraud or another issue.
    Based on people, places, or practices that have already been implicated in fraud incidents, advanced analytics predict if additional materials or behaviors may be used in fraud.
    – Establishing linkage analysis that links information related to earlier frauds (such as identities, emails, credit card numbers, employment histories, etc.) for faster detection and prevention.
    – Conducting textual evaluation entails looking over correspondence, paperwork, and other text-based evidence for common lingo and expressive styles utilized in frauds.

Awareness Training 

Banks have numerous difficulties in identifying scams. Cyberattacks have become more complex and evolved with the progress of technology, necessitating awareness training for customers, employees, and directors is a must. Banks can reduce fraud by spreading awareness amongst their users. Training can aid in the prevention and early detection of fraud. Planning for awareness training be done considering the major challenges. In the financial sectors, security and awareness education are crucial.  

Components for defining the training plan: 

  • Fundamental Awareness of Staff Members: Understanding the meaning of frauds 
  • Knowledge of technical scams and their types: Phishing, ransomware, malware, APT, and social engineering attacks. 
  • Motive behind the frauds: Check on RFA (Red flag accounts) which are large amount loans and large money transfers accounts 
  • Reporting Mechanism: Assess and identify fraud  
  • Incident Response Mechanism: Managing the consequence of the Cyberattack 

Training Programs for fraud awareness should be mandatory. Planning and carrying out training on a regular basis would facilitate educating the staff, clients, and target audiences about fraud and preventive action. 

The training’s effective content will increase the trainees’ interest. To avoid being restricted by the conventional banking system, the personnel should be taught how to use technology and equipment.  

Large-scale cyberattacks are caused by small errors. Bank processing systems are the subject of cyberattacks that interfere with significant financial transactions. Customers should be advised that in cases of missing funds or unauthorized logins to net banking, they should notify the bank immediately.  

For instance, consumers should increase the number of cashless transactions while taking all necessary security precautions. To ensure that they always take precautions against assaults, all employees should be given information about the severe effects of security breaches, cyber system hacks, and ATM system hacks. 

Apart from inculcating a cyber-safe behavior amongst stakeholders, banks should also implement the following in their systems and process 

  • Proper risk management system: A well-structured risk management service will improve systemic accountability and transparency. Given the sharp rise in cyber fraud, all banks and financial institutions must now implement this measure. 
  • Implementing Proper Risk assessment framework: The management of fraud risk is an essential activity, not a one-time occurrence. Fraudulent risk assessment includes conducting organization-wide fraudulent risk assessments of elevated activities and operations, evaluating the effectiveness of corporate governance in risk management, and recording results in the context of a comprehensive fraudulent risk level. Fraudulent threats are an assessment outcome that change and grows within an organization. 
  • Implementing Regulatory Governance Compliance: Implementing a suitable governance and compliance framework can also reduce cybercrime in the banking industry. Banks must recognize the growing need to address and control suspicious transactions in a thorough and integrated manner, which will also be advantageous to a business in many ways. As the basis for effective antifraud approaches, antifraud programs, safeguards, ethical behavior, and adherence to procedures and guidelines in organizational processes are assessed by determining their vulnerability to fraud. Both the fraud system and internal control suffered from a lack of adequate financial regulation. 
  • Implementing employee monitoring:  Employee monitoring can assist in the decrease of fraud to some extent, and effective monitoring can support improved security. False or deceptive employee identification, irregular account access, and monitoring involving login information for no legitimate business purpose, account settings outside of typical business circumstances, and bank information from outside the bank’s geographic region are all examples of improper employee identification. 
  • Appropriate System/ IT Audits: An audit is a crucial component of the detailed analysis and is used for both detecting and preventing fraud. Additionally, it reduces an organization’s risk exposure. A well-designed internal structure should be flexible and prepared to meet the needs of the company. Although many factors affect cyber risk, banks should prioritize the criteria when determining if they are at a higher risk of cybercrime such as technical intrusions, a form of crime that has lately spread throughout the globe more widely. Many firms’ internal networking can now be accessible thanks to our accounts’ accessibility, data in the cloud, and portable devices. There are numerous reasons why, including company structures, data floods, and technological advances. 
  • Using Vigilance tools: Detection and prevention tools are being used to prevent odd and excessive internet transactions. These systems constantly track user behavior and offer risk metrics to detect possibly illegal transactions, interactions, or access. The IT and regulatory departments of e-commerce companies and online financial institutions use those technologies to continuously monitor for fraudulent customer behavior.Cyber safe behaviour in Banking systems


Fraud has severe repercussions that extend beyond monetary loss. While cybercrime affects people, companies, organizations, services, and the environment. If organizations are aware of the overall effects of fraud, they will be able to make wiser decisions. Any type of fraud, whether it is committed by opportunistic individuals or huge organized crime groups, can have serious repercussions. On the other side, major organized crime can frequently increase the size and impact of fraud. Numerous robust features in the current security frameworks help to reduce the risk of cyber fraud.

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