E-banking fraud is an issue being experienced globally and is continuing to prove costly to both banks and customers. E-commerce, on-line banking and related technologies have resulted in millions of dollars of financial transactions taking place across network connections and as banks expand their array of online services to clients, the risk of internet computer fraud (ICF) increases and the risk landscape changes.
Financially motivated high-profile attacks have been observed across the globe with the growing patronage of e- banking services and its anticipated dominance in the near future. Some of the known factors that contribute to the acute problem of security must be addressed.
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| CYBER-FRAUD Are You Safe? |
Our first article on Cyber Fraud served as the first in a series of articles that seek to enlighten you on what it is and how it can be mitigated. This second article will take a more detailed look at some of the issues that might help you understand Cyber-Fraud. In modern times banks are not so often robbed because money is not only kept in bank vaults. In up-to-the-minute computer technologies and data networks a lot of money exists in cyber space. Banks have to adapt to modern trends of doing business electronically and at the same time protect themselves against cyber-crimes.
The first recorded “cyber- crime” took place in the year 1820! That is not surprising considering the fact that the abacus, which is thought to be the earliest form of a computer, has been around since 3500 BC in India, Japan and China. The eon of modern computers, however, began with the analytical engine of Charles Babbage. Of late all banks have implemented cyber banking in one way or the other.
Electronic banking has grown significantly in recent years. Banking institutions have already introduced mobile banking products in partnership with mobile operators and the number of banking institutions venturing into mobile banking are on the increase.
The, volume of mobile payment transactions and the volumes of internet transactions also increased substantially. However, as more businesses and customers launch their money into cyberspace, opportunities for 21st century tech-savvy thieves also increase.
While on the one hand, are coping with global developments in technology, on the other hand cyber fraud perpetrators are on the look-out.
At global level ICT advancement has immensely contributed to economic development including finance and banking. The internet is one of the fastest-growing areas of technical infrastructure development. Today information and communication technologies (ICTs) are omnipresent and the trend towards digitization is growing. Due to the pivotal roles of banks in the growth and economic development of any nation, it has become very necessary to protect these institutions from the antics of fraudsters. However, it is the same ICT systems used by the banks which are negatively utilized by perpetrators of fraud. The increased use of ICT such as computers, mobile phones, internet and other associated technologies are the routes which gave rise to lot of constructive work as well as destructive work. The destructive activities are considered as ‘electronic crime’ which includes spamming, credit card fraud, ATM frauds, money laundering, phishing, identity theft, denial of service and other host contributing crime.
While straight-through-transaction processing has afforded new levels of efficiency for financial institutions and greater convenience for consumers, it also creates new opportunities for fraud, as transactions are faster, do not require any human intervention, and are often “anonymous”. Cyberspace has proved resilient to attacks, but the underlying dynamic of the online world has always been that it is easier to attack than to defend. On that note, the contemporary approach at all levels on how to preserve, protect and govern the common good of a trusted cyberspace must be developed, since the growth of the information society is accompanied by new and serious threats. The rising of such threats at various stages is because of the explosion of online banking coupled with the acceptance by consumers to disclose sensitive information over internet.
Electronic banking has grown significantly in recent years. Banking institutions have already introduced mobile banking products in partnership with mobile operators and the number of banking institutions venturing into mobile banking are on the increase.
The, volume of mobile payment transactions and the volumes of internet transactions also increased substantially. However, as more businesses and customers launch their money into cyberspace, opportunities for 21st century tech-savvy thieves also increase.
While on the one hand, are coping with global developments in technology, on the other hand cyber fraud perpetrators are on the look-out.
At global level ICT advancement has immensely contributed to economic development including finance and banking. The internet is one of the fastest-growing areas of technical infrastructure development. Today information and communication technologies (ICTs) are omnipresent and the trend towards digitization is growing. Due to the pivotal roles of banks in the growth and economic development of any nation, it has become very necessary to protect these institutions from the antics of fraudsters. However, it is the same ICT systems used by the banks which are negatively utilized by perpetrators of fraud. The increased use of ICT such as computers, mobile phones, internet and other associated technologies are the routes which gave rise to lot of constructive work as well as destructive work. The destructive activities are considered as ‘electronic crime’ which includes spamming, credit card fraud, ATM frauds, money laundering, phishing, identity theft, denial of service and other host contributing crime.
While straight-through-transaction processing has afforded new levels of efficiency for financial institutions and greater convenience for consumers, it also creates new opportunities for fraud, as transactions are faster, do not require any human intervention, and are often “anonymous”. Cyberspace has proved resilient to attacks, but the underlying dynamic of the online world has always been that it is easier to attack than to defend. On that note, the contemporary approach at all levels on how to preserve, protect and govern the common good of a trusted cyberspace must be developed, since the growth of the information society is accompanied by new and serious threats. The rising of such threats at various stages is because of the explosion of online banking coupled with the acceptance by consumers to disclose sensitive information over internet.
Electronic fraud is committed in different ways.
In the next article we will be looking at Types of Cyber-Fraud.
Written By SHEWANGU DZOMIRA (PhD) For Arthur Mutambara
In the next article we will be looking at Types of Cyber-Fraud.
Written By SHEWANGU DZOMIRA (PhD) For Arthur Mutambara
Dr. Shewangu Dzomira is a proven researcher and scholar having published book chaptes and more than 14 articles in accredited journals related to cyber banking, cyber fraud risk management, finance and banking, business ethics, taxation and corporate governance. He is an Accountant by profession cum academia. Shewangu has presented more than 8 papers both at national and international conferences in Zimbabwe, South Africa, Europe and USA.
