The pandemic and its wide-ranging implications rapidly accelerated digital adoption across sectors. The payments industry in particular saw structural change in payments operating models and consumer behaviour patterns with digital contactless payments quickly becoming the norm.
As per the PACE Pulse Survey 2020, by FIS® (NYSE: FIS)—a global leader in financial services technology—68 percent of Indians are now using online or mobile banking to conduct financial transactions, and 51 percent expect to continue using these banking and payment methods after the pandemic.
But with the evolution of the payments ecosystem came the critical challenge of mitigating cyber-security risks. As payment providers worked on providing consumers with digital payment modes, it left them vulnerable to impending cyber frauds and other threats. To address these rising concerns, we put together a panel of experts to discuss the need for a robust cyber-security policy, creating cyber security strategies for financial institutions, building a compliance and regulatory framework, and what are the best practices for risk management. The panel, moderated by anchor Sakshi Batra, included Bharat Panchal, Chief Risk Officer - India, Middle East and Africa, FIS; Topendra Bhattacharjee, Head - Digital Banking, RBL Bank; Vishal Jain, Partner, Deloitte; and Rameshwar Gupta, CTO Freecharge.
Excerpts from the discussion:
Sakshi Batra: What are the cyber considerations for organisations as they recalibrate their strategies to ensure business continuity amid the pandemic?
Vishal Jain: Due to the COVID-19 pandemic, people are particularly concerned about touching surfaces and even currencies, which has led to a rise in digital payments. Technology is playing a critical role in building the foundation of this digital infrastructure. If it's disrupted, online businesses such as e-commerce and payments will all be impacted. From a continuity perspective, having a resilient infrastructure and moving to a virtual environment are very critical to ensure reliability and scalability.
Sakshi Batra: Since the onset of COVID-19, we've seen a sharp rise in phishing. A Security Network report suggests that in Q1 alone we've seen a 37 percent rise in cyber-attacks on a sequential basis. Why is this pandemic making companies so vulnerable to cyber-attacks?
Bharat Panchal: We were caught unaware by this crisis. Predominantly 87 percent of cyber-attacks take place within mere minutes, out of which 68 percent get captured after months. This shows us the glaring disparity between the time an attack happens and when we get notified of it. One of the reasons people were asked to work from home is that companies were not prepared to manage the transformational changes that came about. The focus was on business continuity and not cyber-security. There was a need to plan for security even for remote workers.
Sakshi Batra: It seems like the financial sector has become a prime target of cyber-attacks during this pandemic with a sudden spike in the data stored online. What cyber security measures are you taking at Freecharge to build a risk-free financial ecosystem?
Rameshwar Gupta: There's definitely a spike in data theft during this time. We are a mobile-first company and we believe in data segregation encryptions and multi-layer authentication for users. Often people try to log into others' accounts, they get many OTPs which indicates a security breach. So we introduced captcha as well for added security. We've also invested into machine learning to send us alerts if any fraudsters are attempting to infiltrate the system. This allows us to block them and prevent impending threats.
Sakshi Batra: We're seeing that cyber-attacks are becoming more and more sophisticated; especially in the last few months. Do you think the problem is getting compounded by the fact that cyberspace is borderless, and there is no need for substantial resource or expertise for carrying out attacks?
Topendra Bhattacharjee: Since March, we've seen a rampant change in digital payment adoption, and the pandemic has accelerated payment landscape many-fold. We have seen a change in the consumer behaviour of people who were previously not too conversant with digital or had the inertia to move to digital channels. So if you look at some of the data points we at RBL have seen, we are currently opening four times more savings accounts from our digital on-boarding platform than we did before. Most of our FDs are also through the digital route. We've also seen a rise in bank transactions that we've enabled on all our digital applications.
Sakshi Batra: Can you help us understand the big challenges being faced by the digital payments industry currently?
Bharat Panchal: India has had two major events in the past few years that have led to the expansion of digital payments. One was demonetisation where people were asked to switch to digital payment modes overnight. And the other is the ongoing pandemic. Right now, many people are not accepting currency due to the contact transfer. The biggest challenge is of business continuity and hence it's crucial to have the digital infrastructure in place. The banking industry fortunately has built a robust, modern infrastructure with numerous data centres and other models to mitigate these challenges.
If you missed this webinar, you can watch it here:
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