The Dangers of Online Banking in India in 202

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Do you use online banking? Why wouldn’t you? After all, it makes it quick and easy to perform a range of financial transactions on our devices without visiting a bank branch.

The advantages of online banking are numerous and undeniable. But have you ever wondered: how safe is online banking?

The history of online banking in India

Despite having a well-developed technology sector, India introduced online banking later than some other countries.

Banking computerization was created in the 1980s, and the subsequent growth of online banking has been characterized by rapid evolution.

Customers no longer needed to go to a bank branch. They could do their banking from anywhere and at any time.

The UPI (Unified Payments Interface) real-time payment system and mobile banking were launched, bringing banking services to more people.

E-Banking is currently the most widely used banking feature in India, but – again – is it secure?

What are the online banking risks for Indian customers in 2022?

Scams and Malware

As is the case globally, Indian bank customers are falling prey to hackers, scams, identity theft, and infection of devices with malware and spyware. An incident illustrating this occurred in September 2021 when Android phone banking customers were targeted by Trojan horse malware that used phishing to steal data.

security fraud

This threat is less likely because banks take the security of their sites very seriously and implement protection. However, several case studies show that it does happen. For example, 2018 saw cyberattacks on Cosmos Bank when hackers gained access to the ATM server. Canara Bank ATMs were hacked using skimming devices. In the same year, SIM card swaps allowed hackers to transfer huge sums of money using online banking.

Cyber ​​attacks

Indian banks and financial institutions, like all others, are susceptible to cyberattacks. This leads to data, reputation and financial losses. In April 2022, Indian lending app CashMama suffered a major data breach.

power outages

Power loss is an often overlooked issue. However, without electricity, banking services – online and traditional – stop working. For example, in October 2020, the financial capital, Mumbai, was hit by a massive power outage. It wasn’t the result of a cyberattack, but the power outage caused massive disruption to financial services and mobile coverage.

According to India’s Minister of State for Electronics and Computers, there has been a 2,90,445 lakh cybersecurity incidents in digital banking in 2020 alone.

You can take action to reduce your personal risk of scams, malware, and cyberattacks. The other issues raised above are out of the hands of the individual.

So what can you do to protect yourself in 2022?

To guard against cyberattacks and scams, you should take certain steps to protect your data and accounts:

  • Install a VPN. It will encrypt and protect your data and “hide” your online activity. You can read more about what a VPN is and decide if you need one.
  • Use licensed anti-virus software. Legit antivirus programs will block harmful websites and remove most malware.
  • Use strong passwords and change them regularly. This makes it much more difficult for your accounts to be hacked.
  • Disconnect devices from the internet when not in use. Again, this makes hacking more difficult.
  • Avoid public Wi-Fi as it may not be secure. If you use it, delete your browsing history and temporary files, and sign out of everything when you’re done.
  • After making a transaction, verify it against your bank account. This way, you can guard against fraud and report any transactions you didn’t complete.
  • Do not share sensitive information with anyone. This includes your ATM PIN and passwords for all online accounts. These details allow others to access your accounts and data.
  • Avoid phishing by recognizing illegitimate emails and not clicking on suspicious links. No bank will ever ask you for this type of information over the phone or by email.

Unfortunately, there is little that individuals can do to reduce other risks. The impact they have can be seen in specific examples.

The pandemic has forced many people who were hesitant to switch to online banking to do so. At the same time, continuous improvements in security and connectivity continue to make online banking services accessible to a growing number of individuals and organizations.

However, the breaches we have discussed, and others that have not been covered in this article, are a wake-up call for the banking industry and the Indian government.

At the national level, the security of mobile networks must be improved, and power supplies must also be safeguarded.

More security is required by the banking industry in the form of:

  • Improved encryption.
  • Improved access management and control.
  • Improve employee training and awareness.
  • Cloud security monitoring.
  • Development of disaster recovery plans.

As the Government of India and the Reserve Bank take further proactive steps to guard against cyber attacks and power outages, in 2022, this sector requires special attention and more updates than ever.

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