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Cyberattacks: The Achilles heel of digital banks
Banks have been assigned a large scope of responsibility – not only for protecting the confidentiality and security of customers’ data, but also for losses incurred as a result of bank negligence.
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Banks have been assigned a large scope of responsibility – not only for protecting the confidentiality and security of customers’ data, but also for losses incurred as a result of bank negligence. (Reuters/Kacper Pempel)
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n the midst of our ongoing efforts to embrace the digital age, there has been a rise in cyberattacks in Indonesia. According to national cyber agency data, there were 888 million attempted attacks recorded from January to August 2021. Various corporations, private institutions and even government agencies have fallen victim to cybercrime.
Banks are one of the main targets, not only because of the amount of money they handle in transactions but also because of the vast value of the data they manage. As a result, cybersecurity has been among banks’ top priorities.
Nonetheless, for banks with a digital presence it takes more than just improving customers’ digital and financial literacy or applying cyber risk mitigation strategies to safeguard against cyberattacks.
To have a better picture of the challenges, we need to look further at existing regulations.
Currently, the umbrella regulation for digital transactions is the 2016 Electronic Information and Transactions (ITE) Law. It requires an electronic systems operator to manage the systems safely and be liable for the losses it may cause to users.
In the banking industry, the Financial Services Authority (OJK) recently issued new regulations (POJK) concerning digital banks, namely a POJK on commercial banks and a POJK on the implementation of commercial bank products. It provides that digital banks must fulfill certain requirements, including innovative technology, adequate risk management and protection of customer data.
Furthermore, banks are responsible for consumers’ losses arising from errors and/or omissions by the managers, bank employees and/or third parties working for the benefit of the bank. Thus, banks have been assigned a large scope of responsibility – not only for protecting the confidentiality and security of customers’ data, but also for losses incurred as a result of bank negligence.
