Local banks beef up security measures against online fraud

CEBU, Philippines - Local banks are beefing up security measures against fraud in the online banking system as more and more clients are now embracing online banking transactions.

Prudencio Gesta, Cebu Bankers Club (CBC) past president said that apart from the measures already in place, extra vigilance is likewise warranted in order to protect the banking public.

"Most banks have continued to update their firewalls or internal controls against any type of crimes," Gesta said.

However, criminals will not stop to break these controls by using other new and advanced methods which at time could be successful.

Gesta’s call followed after the recent survey conducted by Kaspersky Lab, in cooperation with B2B International, which found that about half of banks and payment systems prefer to handle cyber incidents when they happen, rather than invest into tools with which to prevent them.

“Relying solely on mitigating the negative consequences of fraud is similar to trying to treat the symptoms of an illness rather than its root cause.                            The symptoms will recur, and the illness will progress. In this respect, Kaspersky Lab recommends that you do not forget how important prevention is,” said  Kaspersky Lab's Global Head of the Fraud Prevention Division Ross Hogan in a statement.

The survey entitled "IT Security Risks Survey 2015" was done among company representatives to find out their attitudes towards information security, including financial companies’ policies towards protection from online fraud. It involved more than 5,000 company representatives, including 131 banks' and payment services' representatives, from 26 countries.

"The survey revealed that 48 percent of financial organizations said they take measures to protect their clients from online fraud, aiming at mitigating the consequences rather than preventing incidents entirely, while 29 percent of companies believe it is cheaper and more effective to address cases of fraud as they occur, rather than to attempt to prevent them," Hogan said.

Worst, only 41 percent of organizations necessarily take measures to prevent such an incident from re-occurring in the future, only 36 percent of companies conduct an analysis of the vulnerability exploited in the attack, and only 38 percent compensate the losses.

“Many of the world’s leading banks have acknowledged this and have implemented ‘root cause fraud prevention’, but alarmingly many still rely on ‘reactive fraud detection’ while each year, cybercriminals invent more and more sophisticated methods of attack, and if the banks do not have preventive measures in place, it enables further growth in the numbers of financial cybercrime and increased losses,” Hogan said.

In the Philippines, most of the online security policies are defined by the headquarter office mostly located in Manila.

Gesta added Cebu bankers can help prevent crime by strictly complying its existing internal control policies against this type of crimes.

As of July this year,  Bangko Sentral ng Pilipinas record revealed that domestic liquidity reached P7.7 trillion, 8.5 percent higher than that of July last year.

Most cyber crimes committed in the country include credit card skimming and ATM skimming.

In an earlier interview with information security consultant Dexter Laggui, he reiterated and echoed warnings by experts to be extra careful in any online transaction, especially banking transactions, as more hackers are also investing in a lot of money to advance their craft.

Cyberthreats nowadays are becoming one of the most desired avenues for criminals, especially for robbery, as doing so does not give higher physical risks, but only needs little personal information of the possible victim, and money transfer can be smoothly done. —(FREEMAN)