Cyber Crime in Financial Institution
Cyber fraud in financial institutions is a growing concern as technology continues to advance and financial transactions become increasingly through electronic mode. Cyber fraud refers to any illegal activity that involves the use of computers, networks, or other digital devices to steal or manipulate sensitive information for financial gain causing wrongful loss to the victim.
Some common types of cyber fraud in financial institutions include-
Phishing Attacks:
involve sending fraudulent emails or messages to individuals, often impersonating legitimate institutions, in an attempt to obtain sensitive information such as passwords, credit card numbers, or bank account details
Malware Attacks:
involve infecting a system with malicious software, such as viruses or Trojan horses, to gain unauthorized access to financial data
Identity Theft:
involves stealing personal information, such as social security numbers, to open credit accounts or commit other financial crimes
Social Engineering Scams:
involve using psychological manipulation to trick individuals into divulging sensitive information or performing actions that benefit the attacker.
To prevent cyber fraud in financial institutions, it is important to have strong security measures in place, including firewalls, anti-virus software, and data encryption. Additionally, employees should receive regular training on how to identify and respond to potential cyber threats. Customers should also be educated on how to protect them from cyber fraud and encouraged to use secure passwords and two-factor authentication. Finally, financial institutions should have a comprehensive incident response plan in place to quickly detect and respond to any potential cyber attacks.
Cyber fraud even when no transaction is initiated by card holder. One example of such a fraud is identity theft. In this, a cyber criminal steals the personal information of the victim, such as their name, date of birth, or credit card details, and uses it to make fraudulent purchases or open new credit accounts in the victim’s name.
Another example of cyber fraud is account takeover, where the cyber criminal gains unauthorized access to the victim’s financial account, such as a bank account or credit card account, and initiates transactions without the victim’s knowledge or consent. This can happen through various methods such as phishing attacks, malware attacks, or social engineering tactics.
It is important to take measures to prevent cyber fraud, such as using strong and unique passwords, enabling two-factor authentication, monitoring account activity regularly, and being cautious of suspicious emails, texts, or phone calls asking for personal information. Financial institutions also have security measures in place to detect and prevent fraudulent transactions and may reach out to the cardholder to verify any unusual activity on the account.
Customer should also get legal help from cyber crime experts immediately if any unauthorized transaction is detected.
Source: Research, Swarupa Ghosh (Advocate), RBI Ombudsman.