Safety and Security in E-Banking - Report Example

Safety and Security in E-Banking Introduction Information technology development has a vast effect in the world of banking, as it helps in providing flexible payment and easy accessible banking service methods to the people. Electronic banking (e-banking) assists the consumers to access the internet so that they can easily undertake the transactions related to the banking. Not only it helps in easy access but it also involves transferring funds and buying or selling of products online. There are several benefits that e-banking provides to the people and therefore in this respect it is important for a bank to evaluate the risks associated with it for the safety and security of the people. One of the most important steps that should be taken up by the bank is to handle the various risks which are associated with e-banking for the easy accessibility of the people. In this context, it is worth mentioning that, trust is one of the significant aspects that should be considered when conducting e- banking. For the consumer to have trust on e-banking, privacy along with security is the key determinant (Dixit & Datta, 2010). The increase in the use of e-banking is due to the cost effectiveness it provides to the people. This is also giving rise to the growing concern of risks and its controlling measure in order to remain effective and efficient. The increasing need of flexibility, along with rapid and secure exchange is giving importance to e-banking. The paper evaluates the number of issues faced by the banking customers due to e-banking and the mitigation of the risks by implementing software and technologies so that the safety and security is maintained. Discussion There are various concerns related to e-banking that are arising on the basis of security and information protection from the governments, businesses along with individuals. Governments are concerned regarding the ‘Antitrust laws’ in e-banking in order to maintain quality encryption for security. The business is concerned with the safety related to payments of lump sum amount and the individuals are concerned with the maintenance of the personal information. The key security issue by e-banking is to protect the interests of the individuals and the banks with the help of technologies to minimize the risk. The dimension of security is a vital issue faced by the user of e-banking techniques (Yang, 1997). The risks associated with the e-banking are operational risks that are common as they are related to transaction. The operational risks might lead to inaccurate processing which relates to data integrity and privacy. Security risk is related to the unauthorized access to information which is critical in nature related to accounting system leading to a lack of safety. The increase in the unauthorized access to the network affects the level of security for the process of banking. Another concern is related with the non-repudiability while conducting the transactions; which implies that both the receiver along with the sender will require a reliable identification for the purpose of security and safety (Yang, 1997). The major risk following the concern of the people regarding the issue of e-banking is hacking. Moreover, other risk which is related to the users of e-banking is the virus attacks such as Trojan Horse. The reputational risk leads to negative customer relations when the transaction is not smooth and the information of the customers are not secured. These aspects give rise to money laundering as well hence it is important to have advanced secured technology in use (RBI, n.d). In this regard, it is important for the banks to enhance their technology and upgrade their system by implementing software-based protection and hardware-based protection to ensure more safety and security. Therefore, to provide secure banking transactions through e-banking the technological issue of security, anonymity, divisibility along with authentication needs to be maintained (Marinakis & Karanikolas, 2007). The coding along with decoding of the banking information for the safety of the user is done with the help of the specialized security software. Encryption is the main way of maintaining the security of the information related to the banking transactions. Encryption is one of the best methods to maintain the information as it involves both the parties’ intervention to encrypt as well as decrypt the information to protect the security and reliability. There are a few examples of the technologies which help in protecting the data to ensure the level of safety and security of e-banking. The technologies for the safety and security validity are the use of digital signature, Pretty Good Privacy, Secure Electronic Transaction and also Kerberos (Yang, 1997). Digital signature provides a private key as well as a public key to evaluate the authentication of the transaction and to ensure high level of security. The digital signature encloses information which is known as “one-way hash” so that no one will be able to forge the signature and carry out illegal transaction. The signature will be authenticated before the transaction is complete with the help of the technology i.e. the private and public key encrypted. Any discrepancies lead to the failure of the transaction (Yang, 1997). Secure Electronic Transaction (SET) is one of the software systems, which is used globally as a benchmark for the secure card payment through the use of the internet which includes the VISA card. This technology is used by the banks in order to secure the online transactions at large. SET is a technology which can be used by the people even in the cyber space but due to the encryption facility, the transaction conducted will be secure which will in turn help in maintaining confidentiality. The technology is useful as it assists in proving the level of authentication while the data transit is done (Yang, 1997). In this regard, the use of PayPal technology in the banking industry is useful to increase the safety of online payments. It helps in money transfer with security and reliability as it has high level of encryption which helps in safeguarding the information of the e-banking users (PayPal, 2014). Kerberos is another technology which is also known as the three-headed watchdog which is one of the well-developed technologies. This technology creates a ticket which identifies the genuine user. The technology uses the coded messages and the private key in order to secure the transaction from the hackers and build in trust and faith among the users (Yang, 1997). Pretty Good Privacy (PGP) is another technology used to authenticate the channel and user for the transaction to be secure with confidentiality maintained. The e-banking also needs to secure itself from the virus attacks such as Trojan Horse with the help of malware so that the loss of data is mitigated and data integrity is maintained throughout the process of transaction. Firewall protection prevents the intruders from hampering the data confidentiality and privacy (Yang, 1997). Moreover, e-banking can be made secured with the help of technology for authentication. Transaction Authentication Number is a number which needs to be entered by the user to check the validity of the user with the help of one-time password (OTP) devices. Smartcard System is another technology which restricts the virus from attacking the chip so that the confidential data is maintained. The system has a small chip which accomplishes the authentication with the help of algorithms to maintain the safety and security. For the e-banking to be effective and efficient, security software is to be installed and regularly updated to minimize the risk of virus attack. Thus, the safety and security of e-banking can be addressed by using the encryption and authentication technologies along with the firewall protection software to increase the e-banking users throughout the world (US-CERT, 2008; Makowski, 2007). Conclusion The internet is used by the people and the banking industry to make the transaction and accessibility easier for the users. E-banking offers the allied customers with many transactional benefits to make the process convenient. However, e-banking to be secure and risk free requires various technological and software usage. In order to ensure that e-banking grows effectively along with security and privacy, a number of software and hardware based systems have been employed to attract more users. With the technological advancements and security improvements, the future of e-banking will become more prosperous as the fear of a lack of confidentiality and data integrity will be reduced. References Dixit, N., & Datta, S.K. (2010). Acceptance of e-banking among adult customers. Journal of Internet Banking and Commerce, 15(2): 2-17. Marinakis, C.J., & Karanikolas, N.N. (2007). Strengthening the security of e-banking transactions. Technological Educational Institute, 560-570. Makowski, M. (2007). Banking securely online. Retrieved from https://www.postbank.de/postbank/docs/922_274_pbcom_online-banking-security_11_2007_5.pdf PayPal. (2014). Data encryption. Retrieved from https://www.paypal.com/in/webapps/mpp/security/buy-dataencryption RBI. (n.d.). Report on internet banking. Publication Report, 1-130. US-CERT. (2008). Banking securely online. Banking, 1-7. Yang, Y.J. (1997). The security of electronic banking. Computer Security Resource Centre, 1-12. Read More