Security Risks to On-line Banking and E-commerce - Essay Example

The incorporation of legacy systems in e-banking platforms, the reliance of banks on third-party ISPs, and that are just to name a few. Though, the Internet has made it possible for businesses to carry out their activities in a more efficient and cost-effective manner but at the same time, it has proved to be more insecure than traditional ways of trade because practically, it is much more difficult and expensive to tackle fraudulent activities that cyber-criminals and hackers carry out aggressively to steal confidential; financial data of online-businesses for their own benefit.

One of the prime reasons for the popularity of cyber-crimes is the secrecy of the cybercriminal as compared to physical theft because the location and physical whereabouts remain anonymous most of the times in the first instance. Even though many online-businesses have nowadays implemented strong technologies that monitor their networks against suspicious activities but this does not guarantee that hackers will not succeed and most of the times, it is too late to know as heavy damage has already been done.

Electronic commerce, especially in the form of online banking, poses many security risks that are specifically involved when trying to operate as an online business. According to recent surveys, the number of destructive applications, that specifically target internet transactions, have considerably increased, which is very alarming for users of the internet banking services as well as the financial institutions that are offering these online banking facilities. It is not only I.T security risks that are involved with online banking services but there are many other issues that collectively play a part in any fraudulent activities and all these issues must be addressed by every online banking service provider through the proper risk management controls.

In this report, various types of risks that are specifically related to online-banking are discussed.