While modern technology is undoubtedly a need in today’s ever-changing world to thrive and develop, it is also true that it introduces new types of risk and possible harm to financial stability. The coronavirus epidemic only aggravated the situation by forcing even the less technologically adept portions of society to adapt to e-money.
Numerous financial institutions have chosen to take a more integrated approach to e-banking and payment systems to counter cybercrime and fraud and establish a more secure system, therefore increasing their public trustworthiness.
But, before we go any further, let’s first define and comprehend the terminology we’re discussing to have a better understanding.
Understanding Cyber Security
Let’s begin with the basics. Consider the following scenario: Putting a lock on a physical safe is the online counterpart of cyber security. The majority of individuals now save their money in bank accounts and eWallets. Because payments are being made through digital channels rather than cash, cyber security is more crucial than ever. It’s just as crucial to secure your data and personal information as it is to protect your money.
This may include information such as:
- Photographs and videos
- Government identification
- Contact Information
- IP address
- Financial Transaction hHstory
To give you an example, you may have noticed that VPN, or Virtual Private Network for mobile devices, is mentioned in a lot of advertisements these days. VPN services are programmes that allow you to access the internet using a different IP address than you normally use. This is done to secure your online identity and personal information from dodgy websites when you browse the web.
There’s always criminality where there’s money, regardless of the media. The conventional borders between financial crime and fraud appear to be blurring as crimes become more complex.
Banks are now focusing on a more customer-centric approach to fraud, which allows them to anticipate possible threats and establish controls around their procedures. Let’s define financial crime and fraud first because they can take many different forms.
A crime against property is known as a financial crime. In layman’s terms, it’s the illegal act of transferring ownership of anything unlawfully or in an illegal manner. Fraud, financial market misbehavior, data abuse, proceeds of crime management, and terrorist funding are just a few examples. Fraud, on the other hand, is the use of deception, trickery, and dishonesty to get something of value from another person. It is done for personal advantage, whether financial or otherwise.
Cybercrime, simply explained, is a crime perpetrated with the use of technology and networking. Cybercrime includes things like online fraud, hacking into someone else’s account, and misusing personal information. Money laundering has now crossed over into the cybercrime realm, thanks to the ability to use technology to perform extremely significant financial transactions very effectively and fast.
According to the MLRO (Money Laundering Reporting Officers), transactions done through banks or other certified sources will be logged. Money laundering has evolved from traditional cash-based methods to include peer-to-peer transfers, anonymous internet payment platforms, and even cryptocurrencies. Because bitcoin is a virtual, decentralized, and open-source digital money, it provides a high level of anonymity to criminals, making it difficult for MLRO to discover them.
Keep in mind that this is merely Bitcoin-laundered cash.
One of the most common cyberattacks is money laundering, but it’s also one of the most difficult to detect. To combat it, several agencies and nations have been adopting anti-money laundering (AML) programs, and crypto exchanges such as Binance have begun gathering KYC verification information in an attempt to reduce the danger and boost compliance.
Cybercrime is becoming a more complicated problem that is difficult to identify and correct, particularly for those with limited expertise in computers, networking, and the internet.
Criminals are continually devising new and inventive ways to perpetrate crimes, necessitating the urgent need for improved security measures and regulations.
As individuals adapt to a more digital lifestyle and incorporate technology into more aspects of their everyday lives, it is more important than ever to be aware of one’s vulnerabilities and employ technologies that preserve and protect personal data to prevent being hacked.