Online security
As Pakistan continues on the long road to digitising the economy, a process that has seen an unexpected boost as a side effect of the Covid-19 coronavirus pandemic, some experts have also been warning about the problems that online fraud poses. Pakistani banks apparently lose about Rs1 billion to various forms of online fraud. Chief among these are ATM skimming and phone calls and messages to get people to reveal their bank data or other information. There may be some silver lining here. ATM skimming is directly tied to the use of physical ATMs to withdraw cash or access banking services that are mostly available online. As we transition towards more cashless transactions, the need for currency notes will invariably decline. Banks could look at introducing options such as debit card cash back at stores, which would help reduce demand for ATMs and have benefits for retailers.
Encouraging increased use of online banking through easier apps is also important, and some Pakistani banks are doing a good job at this. As for the ‘good old’ phone-based scams, avoiding these is often only a matter of common sense. While advanced scams using phone number masking remain a threat, most phone-based scams are easily spotted by anyone who reads those annoying reminders that banks send out about which phone numbers to trust, and what details to never give away on a phone call. The fact that this remains a problem is more on consumers than the banks. If citizens would listen, maybe we would need less annoying reminders, and that would be a good thing for everyone. At the same time, online security is an area that banks need to focus on. We have read the stories of banks being defrauded of hundreds of millions of dollars by hackers. The last decade has seen almost a dozen cyberattacks on Pakistan’s banking system.
Systems need to keep up with the times. Cybersecurity is big business. It is one of those things where banks must invest heavily, keeping in mind the old ‘spend money to make money’ maxim. Vulnerable infrastructure must either be replaced or thoroughly upgraded to ensure safety.
Published in The Express Tribune, September 1st, 2020.
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