Concern over Lack of Security Preparedness Among Fin Institutions | CORPORATE ETHOS

Concern over Lack of Security Preparedness Among Fin Institutions

By: | August 16, 2018
cyber security

Aug 16: Experts from the cyber security sector have raised eyebrows over the preparedness of the country’s banking system with regard to security breaches involving fund transfers. The concern was raised in the wake of over Rs 100 crore being siphoned off from Cosmos Cooperative Bank Ltd.

The Pune-based bank, which is India’s second oldest and second largest cooperative bank, faced the wrath of cyber attack after funds worth Rs 94.42 crore was siphoned off to foreign and domestic bank accounts.

Experts and Bank officials revealed that the fraudulent payment approvals were passed through the proxy switching system that’s used for receiving debit card payment request in the core banking system. Accordingly, the attack was over the switch system used for the payment gateway for Visa/Rupay debit card transactions, and not on the bank’s CBS, leaving the accounts of the customers and its balances unaffected.

Cyber security opinions are of the opinion that banking system is yet to update defense mechanisms against cyber attacks. Despite state-of-the-art security systems being the need of the hour, many financial institutions mull over it only post the occurrence of security breach, leading to loss of reputation and financial misappropriation.

During 2016, country’s leading lender SBI was forced to block around six lakh debit cards following the detection of security breach in non-SBI ATM network. Over 30 lakh debit cards in the country was said to be exposed to potential risk of data breach, and it included debit cards issued by both public sector banks and privatized banks.

The protection of ATMs and branch offices has come up as a challenge in addition to the protection of data centers and security of data of affiliated organizations for financial institutions.