As is commonly known, October is celebrated as cybersecurity awareness month worldwide. Phoenix TechnoCyber organised a workshop on enhancing the cybersecurity for cooperative banks to celebrate this remarkable month. The workshop was attended by 200 bankers and 150 banks pan-India. Bankers came from Gujarat, Maharashtra, Uttar Pradesh, Delhi and other states, to enlighten themselves on the importance of transforming the cyber security systems of cooperative banks.
Cooperative banks play an important role in India’s financial ecosystem. They are the lifeline for countless individuals and small businesses. However, with digital advancement, there is a need for every sector to adapt to modern changes. Cooperative banks are no exception to this. The workshop highlighted the major issues in the current cybersecurity systems of cooperative banks, the importance of taking robust security measures and the ways to securitise the cyber environment of these banks. The agendas of the workshop are mentioned in detail below:
Agenda of the Workshop:
- Major Cyber Risks and Countermeasures
- The Cyber Threat Landscape
- Cybersecurity Best Practices
- Next-Gen Digitalization and IT Compliance
- Preparing for The Digital Future
- RBI Guidelines and Compliance for Digital Banking
- Budgeting for Digital Transformation
- Recent Developments and Challenges
- Digital Personal Data Protection Act 2023
- RBI Inspections & IT Examinations
Experts of Phoenix TechnoCyber presented in detail all the above-mentioned topics. The details of the presentation on each topic are as below.
- Major Cyber Risks and Countermeasures
The workshop began with highlighting the major cyber risks of cooperative banks and then moved ahead with discussing the countermeasures for the same.
- The Cyber Threat Landscape
Cooperative banks face ever-changing cyber dangers nowadays. These cyber-threats include malicious hackers trying to:
- Gain unauthorized access to computer systems for ulterior motives.
- Steal the money of the depositors from their bank accounts.
- Grab sensitive details of bank customers and use them to blackmail or do unlawful activities.
Impact of Covid-19 on Cyberthreats
Cyberthreat concerns have become extremely serious, especially after the Covid-19 phase. The Covid period turned multiple businesses and many other activities online, thus leading to an increase in cyber-threat cases worldwide.
Examples of Cyber Threats from Recent Years
- Cyberthreat cases after Covid-19 became so serious that even Microsoft, despite being a giant tech company, wasn’t left untouched by hackers and was attacked by a hacker group named Lapsus$ on March 20, 2022.
- Even in the Indian banking sector, such serious cyber-crimes are common. Cosmos Bank cyber attack in Pune is known to everyone, where attackers extracted Rs 94.42 crores by breaking the bank’s security system.
The presenters highlighted many different cybersecurity cases from real life that were eye-opening. To stay safe from these severe cyber-crimes, the next discussion was on cybersecurity best practices.
- Cybersecurity Best Practices
Cybersecurity best practices are essential to take care of to keep bank and customer trust safe. Each cooperative bank must work on enforcing strong cybersecurity practices, like the ones mentioned below:
- Keep strong passwords and make regular changes.
- Employee training on identifying phishing emails
- Network security: firewalls and encryption
- Incident response plan: immediate action in case of a breach.
Along with cybersecurity best practices, there is a need to keep pace with technological changes. That calls for adopting next-generation digitalization.
- Next-Gen Digitalization and IT Compliance
Next-gen technology can help with safer banking. Also, it’s crucial to follow the rules set by the RBI (Reserve Bank of India) for digital banking to make sure everything’s in line with security standards.
- Preparing for the Digital Future
It is essential to change with the changing world. Now that the world is becoming more and more digital, there’s a need for Indian cooperative banks to prepare for the same.
- RBI Guidelines and Compliance for Digital Banking:
The Reserve Bank of India (RBI) has some important rules for digital banking:
- Security: The RBI wants banks to keep customers’ money and data safe online.
- Customer Service: Banks should help customers if they have digital banking problems.
- Reporting: Banks must tell RBI about digital issues and fraud.
- Technology Standards: The RBI sets rules for the technology banks must use.
Importance of Compliance with RBI Guidelines
For cooperative banks, following these rules is crucial:
- To Build Trust: If banks follow RBI rules, it will build customer trust in banks more.
- Witness Growth: Digital banking can help cooperative banks grow and reach more people.
- To Avoid Penalties: Not following RBI rules can lead to penalties and fines.
- Budgeting for Digital Transformation
Cooperative banks need to plan the whole money wisely. The presenters clarified that it would help if the banks allocated a substantial portion of their budget to improve cybersecurity. If the budgeting is done smartly, it can help the bank keep up with the digital world and provide safe, efficient customer service. Here’s what the presenters suggested for budgeting task of cooperative banks:
- Cybersecurity: Banks must spend on strong security to protect customer information.
- Technology: Upgrading old systems helps banks offer better digital services.
- Staff Training: Training staff to use new technology is important.
- Customer Experience: Cooperative banks should invest in making digital banking easy and enjoyable for customers.
- Recent Developments and Challenges
The final round of discussion in the workshop was on recent developments and challenges in the cybersecurity of cooperative banks. Since people evolve, why not the banking sector? The Indian banking sector has seen significant developments in recent years and has also faced serious challenges.
- Digital Personal Data Protection Act 2023
The Digital Personal Data Protection Act 2023 was proposed by the Minister of Electronics and Information Technology and passed in the Indian Parliament in August 2023. “The Act provides for the processing of digital Personal Data in a manner that recognizes both the rights of individuals to protect their Personal Data and the need to process such Personal Data for lawful purposes and matters connected therewith or incidental thereto”.
Impact of The Act on Data Security for Banks:
The act deals with personal data, whether it is online or offline digitized data. The impact of this act on the data security mechanisms of banks is as follows:
- Stronger Data Protection: Banks need to be extra careful with the collected personal data of customers. Banks are allowed to use that data only for legitimate purposes.
- Customer Consent: Banks can use customer data only with the permission of the data principal, which means that particular customer, who is the owner of that data.
- Bigger Fines for Mistakes: If banks don’t protect the data adequately, the authorities may impose hefty fines. This is to encourage banks to be extra careful with concerns related to data security.
- RBI Inspections and IT Examinations
RBI inspects to check if banks follow rules. Here are some problems they have found:
Indian Cooperative banks suffer from two major issues in their cybersecurity mechanisms:
- Weak Cybersecurity: Some banks don’t have strong protection against cyberattacks. This puts customer data at risk.
- Outdated Systems: Old computer systems make it easy for hackers to break in. The RBI has seen this in some banks.
The persisting issues in cooperative banks have the following consequences:
- Puts bank customers’ money at risk.
- Weakens the trust of customers in the Indian banking system
- Impacts negatively on India’s financial economy
Here’s what banks need to focus on to resolve and/or avoid these issues:
- Upgrade the current technology
- Improve cybersecurity
- Provide training to staff on modern banking practices
Wrapping-Up
The workshop covered each essential topic for improving the cooperative banks’ cybersecurity measures. Starting from bringing the current cybersecurity issues into the limelight, it looked at what protective measures can be taken.
Cooperative banks in India must embrace digital transformation and build resilience to secure their future. Taking robust cybersecurity measures with the help of technologies like Phoenix TechnoCyber is crucial to ensuring India’s banking system stays strong in the face of challenges and continues to serve the Indian population effectively in the digital age.
