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Cybersecurity Risks in Digital Banking: A Financial Perspective

Authors:

Pranav Sharma

Amity Business School, Amity University Raipur

Abstract:

In an era where digital banking is rapidly redefining the financial landscape, cybersecurity has emerged as a critical concern for financial institutions, regulators, and consumers alike. This study delves into the evolving nature of cybersecurity threats in digital banking, emphasizing the financial ramifications of cyberattacks on banks and their stakeholders. Drawing upon both primary and secondary data—including surveys from bank customers and interviews with industry professionals—the research identifies prevalent threats such as phishing, malware, and unauthorized transactions. Despite growing awareness, many users continue to exhibit risky behaviors like weak password management and limited use of two-factor authentication. The study also highlights a significant communication gap between banks and customers regarding cybersecurity education. From a financial perspective, the consequences of cyber incidents extend beyond immediate monetary losses, encompassing legal penalties, reputational damage, and loss of consumer trust. The findings underscore the urgent need for banks to invest in advanced security technologies, enforce stronger regulatory compliance, and actively engage in customer awareness initiatives. Ultimately, the research advocates for a comprehensive, multi-layered cybersecurity strategy that aligns technological, organizational, and regulatory efforts to build a more resilient digital banking ecosystem.

Keywords:

Digital Banking, Cybersecurity, Financial Risk, Phishing, Ransomware, Data Breach, Customer Trust, Two-Factor Authentication (2FA), Cyber Threats, Regulatory Compliance, Financial Institutions, Risk Mitigation, Mobile Banking Security, Cybercrime, Digital Finance