With the rise of mobility, cashless transactions in developing countries in Asia such as Thailand, Indonesia, China and India are forecast to grow an average of 20 per cent annually by 2015, compared to 5 to 10 percent in mature markets like South Korea, Japan and Australia.
As emerging technologies such as prepaid, online and mobile payments grow rapidly, unconventional players such as Google, Square, Facebook — and now Apple — are challenging banking IT security solutions.
While PCs and laptops remain the primary devices for users to access financial services, mobile devices including tablets and smartphones are rising in popularity in Asia. Mobile devices mean increased security risk.
However, while consumers are now enabled with more ways to buy and pay for goods than ever before, there are greater opportunities for cyber criminals to exploit vulnerabilities.
Rising threat of cyber-crime in Asia Pacific
Asia Pacific in particular is highly susceptible to cyber crime — it is two times more likely to be targeted by advanced cyber-attacks than the rest of the world.
Every 18 seconds there is a cyber victim, making it the most profitable organised crime. However, a recent report from IT firm Kaspersky cites that one out of four organisations are willing to suffer losses incurred by cybercrime because they believe the cost of protection outweighs the cost of dealing with the losses. This is despite 93 percent of financial service providers and 90 percent of ecommerce retailersexperiencing various cyber-threats in the past 12 months.
Stealing money from user accounts is nothing new — cyber criminals have been hacking into unsuspecting victims' accounts for years. However, the risk of fraudulent activity has risen with the growing opportunity for fraudsters to tap into electronic payment tools.
Methods of cyber-intrusion run the gamut of malware, phishing attacks and hacking; resulting in account takeovers, identity theft and network disruptions.
However, as payment technology evolves, we're seeing a rise in mobile banking exploitation and point-of-sales schemes.
Security issues for financial institutions
This gives rise to two major security issues for financial institutions.
Firstly, given the value and sheer volume of the customer data they control, financial institutions are high on a cyber-criminal's list of targets. Cyber attacks against financial institutions are becoming more frequent, sophisticated and widespread. Large scale denial of services (DoS) attacks or customer data theft are the types most likely to hit the news, but smaller credit unions, regional banks and third-party service providers are increasingly seeing breaches across their networks.
Sign up for CIO Asia eNewsletters.