Cybersecurity in Digital Banking: Challenges and Solutions

Abstract

The rapid innovation of digital banking has transformed the financial service sector in terms of convenience, presence, and profitability of the consumers and the organizations. However, this transition to the digital worldbalso brought about some thorny issues of cybersecurity that threatens the confidentiality, integrity and the unavailability of sensitive financial data. The banking system and vulnerability in customer interface has been exploited by phishing, malware attack, identity theft, ransomware and distributed denial of service attack that has gone hi-tech. The consequences of these violations are extreme, including deprivation of funds and reputation, imposition of fines and loss of customer trust on the part of the regulators. Critical issues that the paper will focus on critically include cybersecurity that digital banking is addressing and more specifically, the technological and human aspects of cybersecurity. It is curious to note that the financial institutions were exposed due to the lack of the authentication system, weak encryption, lack of knowing the users and acceptance of regulations. The paper in turn analyzes a number of new and viable solutions. They are, but are not limited to, multi-factor authentication, end to end encryption, artificial intelligence-driven threat detection, blockchain security of transactions, and good incident response systems. The paper also emphasizes the necessity to possess the regulatory convergence, consumer awareness with regard to cybersecurity, and ongoing training of the staff working in the banking areas. The research proposes a well-rounded and stable approach to cybersecurity by combining technological protection with policy responses and user training. Finally, the paper highlights that to achieve trust in digital banking, a dynamic, reactive, and joint strategy to security is necessary, with stakeholder -banks, regulators and customersplaying a role in reducing the dynamic cyber risks.