Protecting banks

In an increasingly digital world, Pakistan’s banking system has become vulnerable in ways it was not a decade ago. As banks have moved much of their services online, the corresponding investment in cyber security has remained low. Major cash deposits remain vulnerable to all forms of cyberattacks. The latest attack has hit BankIslami, one of the smaller banks in the country. Reports say that other banks are taking precautionary measures on overseas transactions. The State Bank of Pakistan (SBP) has offered limited instructions by asking the banks to restrict card usage abroad. While the SBP has insisted that transactions within Pakistan remain safe, customers will not be satisfied until there are more details available on what the breach was and how it has been fixed. In the case of BankIslami, around $6 million was stolen through international transactions from certain bank accounts. The bank claims to have returned the stolen money to the affected accounts. While bank accounts are supposed to be protected by insurance, Pakistani banks are known to be lax about returning any amounts stolen from individual account via cyber scams.

It is important for the SBP to undertake a formal investigation into the security breach. The central bank has claimed it has asked the affected bank to take the requisite precautionary measures, but it would be good if the SBP could issue some detailed instructions of its own. The cyber security systems run by banks in Pakistan are heavily dependent on human monitoring. Many banks require verification of each international transactions via their credit cards. This is supposed to make transactions safer, but it does not qualify as a secure cyber management system. Habib Bank had suffered a major data breach a few years ago, which forced it to block certain accounts and re-issue debit and credit cards to customers. There was a further breach last year when a number of ATMs were hacked. Reports are abound of banks constantly being under cyber attack. Similarly, even car-hailing service Careem suffered a data breach. While it is true that digital security is not easy, with major corporations that invest billions in cyber security breached, there is a need for Pakistani banks to be up to date on the latest ways of tackling the cyber security threat. Banking is facing a new more dangerous world in the digital era. The warning signs are there for Pakistani banks to update their cyber security.