Cyber-crimes 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 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.
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. The Narasimha Committee (1991-1998) which was for the
recommendation on financial matters, suggested that IT shall be used in the
banking sector as well to make it more efficient in the functioning.
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, that 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.
Due to enhanced online recognition through alternative platforms such as the
internet, ATMs, and mobile banking, India has seen an increase in the amount of
debit/credit cards. This amount will gain momentum in the coming days as the
young generations enters the financial tumult.
The objective of this study is to scrutinize the concerns about cyber threats to
the banking sector by highlighting the underlying tactics. It focuses on how
well financial institutions are equipped to deal with cyber-crime events.
Cyber Crime In Banking Industry
Cybercrime refers to any criminal activity carried out on a computer or over the
internet. In other words digital misconduct is referred to as cybercrime where
the criminal exercises a number of wrongdoings such as money transfers and
withdrawals via unauthorized 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. "Online payment with a debit card Customers can access all
types of bank facilities 24 hours a day, 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.
They take advantage of those services by breaking into banking websites and
customers' accounts, causing chaos in accounts and theft of money from
customers' accounts, the best example was "in which one hacker took one rupee
from each account but received a large sum of money with that one rupee."
Impact Of Cybercrime On Banks
- Effects of cyber crimes
Cybercrime 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
- Sabotage and theft to identifiable information
- Exposed to reputation risks
- Operational risks
- Reasons for cyber crimes:
- Easy access to data:
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.
- User's Negligence:
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 cybercriminals' easy access to certain devices and
- Lack of internal control in organizations and banks:
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 computerized environment lapses due to the availability of
inefficient software and hardware systems.
Types of cybercrimes connected with banking sector:
Hacking is a cybercrime that involves a person gaining illegal access to a
system or attempting to circumvent security mechanisms by hacking into
customers' accounts or banking sites. ''A hacker, however, can be prosecuted
under Sections 379 and 406, and also u/s 43(a) read with Section 66 of the
Information Technology (Amendment) Act, 2008.'' If the crime of hacking is
proven, the convicted may be sentenced to three years in prison or a fine of up
to five lakh rupees, or both, under the IT Act.
- Key logging
It is referred to as ''keystroke logging or keyboard capturing''. It is the
process of secretly recording (logging) the keys pressed on a keyboard so that
the person using it is oblivious that their activities are being tracked and
these are incredibly harmful for stealing confidential information such as
banking details etc.
It is a kind of self – replicating program that infects executable code or
documents by inserting copies of itself. A virus is a programme that afflicts an
executable file and causes the file to behave abnormally after infection. It
spreads by linking itself to executable files such as programme files and
operating systems. Loading the executable file could result in new copies of the
virus being created. Worms, on the other hand, are programmes that can
replicate themselves and send copies to other computers from the victim's
computer. Worms do not change or remove any files; instead, they multiply and
send copies to other computers from the user's computer.
Spyware is the most common approach of stealing online banking credentials and
using them for fraudulent purposes. Spyware operates by collecting or
transmitting information between computers and websites. It is mostly installed
by bogus 'pop up' advertisements to have software downloaded. Industry
standard Antivirus products detects and removes this type of software, primarily
by blocking the download and installation before it infects the PC.
Phishing is a kind of swindle in which private information such as Debit/Credit
Card number Customer ID, IPIN, CVV number, Card expiry date, and so on is stolen
via emails that seem to be from a genuine source. Phishing is accomplished
through the use of instant messaging and email spoofing.
In this type of
crime, hoaxers act like officials of banks and they create a direct link that
directs the targeted customers to a fake page which looks alike to the actual
bank website. The acquired confidential information is then used to commit
deceitful transactions on the customer's account.
Phishers these days also use SMS (Smishing) and mobile (voice phishing) to
commit such crimes.
Pharming is carried out through the internet. When a customer logs in to a
bank's website, the attackers hijack the URL in such a way that they are routed
to another website that is false but appears like the bank's original website.
- ATM Skimming and Point of Sale Crimes
Installing a skimming device atop the machine keypad to appear as a real keypad
or a device made to be affixed to the card reader to appear as a part of the
machine is a tactic for compromising ATM machines or POS systems. Malware that
directly steals credit card data may also be installed on these devices.
Skimmers that are successfully installed in ATM machines retrieve personal
identification number (PIN) codes and card numbers, which are then copied to
perform deceitful transactions.
- DNS Cache Poisoning
DNS servers are used in a company's network to increase resolution response
times by caching query results previously received. Poisoning attacks on DNS
servers are carried out by exploiting a flaw in DNS software. As a result, the
server validates DNS responses mistakenly to ensure that they are from an
authoritative source. Incorrect entries will be cached locally by the server and
served to all users who make the same request. Bank customers could be routed to
a server controlled by criminals, which could be used to serve malware or trick
bank customers into providing their credentials to a spoof of a legitimate
website. An attacker can hijack clients by spoofing an IP address; DNS entries
for a bank website on a given DNS server and replacing them with the IP address
of a server they control.
- Malware based-attacks
One of the most dangerous cyber threats to electronic banking services is
malware-based attacks. A malicious code is created in such attacks. The number
of malware attacks in the banking industry is on the rise these days. Zeus,
Spyeye, Carbep, KINS, and Tinba, are some of the most well-known banking
malware. Nearly every virus has two characteristics: one, it secures a backdoor
entry into the system, and the other, it steals a user's credential information.
Due to geopolitical and global macroeconomic conditions, the banking industry in
the world is facing a difficult situation that is thought-provoking. In order to
better analyse and mitigate risks, the banking industry is being forced to
review its existing practices. For risk management, technology-driven approaches
have been used.
Financial services have been expanded to the masses as a result
of the development of information and technology (IT), as well as the
penetration of mobile networks in daily life. However, technology advancement
has made the banking services accessible and affordable but this in turn has
augmented the likelihood of being a target of cyber-attacks.
Cyber thieves have
developed sophisticated methods to not only steal money, but also to spy
companies and gain access to vital business information, which has an indirect
effect on the bank's finances. To combat such cybercrimes, the banking industry
must work with national authorities and watchdog organizations to create a model
that will aid in control.
The major source of interest here is the lack of an
efficient compilation service in the banking industry that can detect patterns
in cybercrime and compile a model based on them.
Cyber-attacks in India
- Cosmos Bank Cyber Attack in Pune
Cosmos Bank in Pune was the target of a recent cyber-attack in India in 2018,
when hackers stole Rs. 94.42 crores from Cosmos Cooperative Bank Ltd situated in
Pune, it rattled the entire banking industry in India. Hackers gained access to
the bank's ATM server and stole the personal information of rupee debit
cardholders and visas in large number. Money was wiped out, and hacker gangs
from as many as 28 nations withdrew the funds as soon as they were notified.
It can be avoided by hardening surveillance measures and assisting approved
- ATM System Hacked
The ATM servers of Canara Bank was targeted in 2018 for cyber-attack. Twenty
lakh rupees were cleared from numerous bank accounts. According to sources,
cyber criminals had access to ATM information for more than 300 users, resulting
in a overall 50 victims. Hackers used skimming machines to capture information
from debit cardholders. Transactions involving stolen information varied in
amount from Rs. 10,000 to Rs. 40,000.  It can be avoided if the protection
mechanisms in ATMs can be improved to avoid data misuse.
- RBI Phishing Scam
The Reserve Bank of India was not spared by the fraudsters in a bold phishing
attempt of its kind. The phishing email, which purported to come from the RBI,
promised the recipient prize money of Rs.10 lakhs within 48 hours if they
clicked on a connection that took them to a website that looked exactly like the
RBI's official website, complete with the same logo and web address. After that,
the user is asked to disclose personal details such as his password, I-pin, and
savings account number. The RBI, on the other hand, issued an alert about the
fake phishing e-mail on its official website.
- The Bank NSP Case
In this particular case a bank management trainee was hitched to be married.
Using the company's computers, the couple exchanged numerous emails. They had
broken up their marriage after some time, and the young lady made some fake
email ids, such as "Indian bar associations," and used them to send emails to
the boy's international clients. She did this via banks computer. The boy's
business lost a large amount of customers and went to court against the bank.
The court decided and made the bank liable because the emails were sent using
the banks system.
The aforementioned cyber-attacks in India should act as an alert to all
individuals and companies who are already prone to cyber threats. It is crucial
for the banking industry and organizations to adopt cyber security measures and
adhere to security guidelines.
Methods to prevent cybercrime
The crimes in the banking industry have alarmingly increased which have resulted
in significant economic losses. As we all know that banking is the most
important mainstay of our economy, so it must be prevented from cyber-attacks.
Awareness should be made to the banks and the customers regarding the risk
involved and also the safety measures to combat the cyber-attack.
For the effective implementation of all the matters of cyber security policy,
the government has established an ''Inter-Departmental Information Security Task
Force (ISTF)'' with the National Security Council as the nodal agency. The
national nodal agency is the ''Indian Computer Emergency Response Team
(CERT-In)'' which is entrusted to check the computer security incidents as they
The main problem related with cybercrime is jurisdiction. Cybercrime happens in
every state so any person, regardless of where they live, should be able to
recognise and monitor cybercrimes. In certain cases, victims of cybercrime may
be impotent to report a cybercrime for a variety of reasons, like living in a
distant area, being unsure of where to report, and privacy concerns. As a result
of the nonexistence of a centralized online cybercrime monitoring system, many
cybercrime incidents go unreported.
The IT Act should be revised to include
a definition of cybercrime as well as a list of instances in which the Act would
have extraterritorial authority. The scope of the IT Act should be expanded to
include the legislative basis for cyber regulation in India. The intermediaries'
responsibilities are ambiguous but that should me made explicit.
Here are numerous ways to reduce the danger of cyber-attack :
- 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 unauthorized 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 organization
because firewall blocks all communication from unauthorized 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 using banking application or internet banking, use a secure
Due to the extreme ease, cost savings, and speed of online transactions, Indian
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, this can be indicated that 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 cybercrime. The rise of cybercrime and the sophistication of the
investigative process necessitates the adoption of adequate steps. In order to
combat cybercrime, it is important to improve stakeholder collaboration.
As part of their overall operational risk management mechanism, banks must keep
up with the latest changes in the IT Act, 2000, and the orders, laws, notices
and regulations issued thereunder relating to bank transactions, as well as
embryonic legal requirements on electronic fund transfers, electronic
signatures, data security, digital signatures and cheque truncation.
During the continual improvement of the technologies used at the financial
institution's backend, certain critical aspects were ignored, which now require
immediate attention. Cybercrime has its own range of appealing characteristics
that have increasingly begun to overshadow conventional crimes. Cybercriminals
are attracted to the level of anonymity, global victim reach, and quick
outcomes, to name a few. Cyber criminals' job is made easier by the lack
of/inadequate awareness campaigns. Owing to a lack of knowledge about the most
recent attack methodologies and documented preventive steps, unaware customers
are easily fooled.
With the growing influence of cybercrime, it is becoming increasingly clear that
local law enforcement agencies lack the requisite skills and resources to
investigate incidents involving cybercrime. Using trained cyber security experts
takes it a step further in terms of obtaining faster and more accurate
cybercrime investigation results.
It is believed that after ensuring and
estimating upon the proper checks on all the problems and involving all the
stakeholders to solve this major problems relating to the technological growth
in the developing countries like India, these kind of risks as mentioned in the
research work can be minimised to a certain extent and we can in a way ensure
India to be digitally safe and secure.
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- Himanshi Lodha and
- Divya Mehta
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