Inducing Blockchain in cybersecurity to streamline digital banking

Digital banking and its usage became inevitable in the post-COVID-19 era. The process of digital banking involves the digitization of every banking activity undertaken by banks, not limited to payments. It enables the banks to engage most holistically with the clients anywhere and anytime. After the COVID-19 pandemic, the limelight on digital technologies has been increasing specifically, in using digital banking services such as making online transactions, payments, cash transfers and so on. Since it entitles contactless transactions. However, higher digitization and remote operations can escalate vulnerabilities and open up the opportunity for cyber threats such as hacking and data breaches. Hence, banks need to be mindful to deal with the challenges of cybersecurity. Furthermore, cybercriminals can attempt to steal factual data such as personally identifiable information, intellectual property, and financial data for profitable manoeuvrings, i.e., monetizing data using ransomware techniques. It can lead to disrupting business operations through overall Distributed Denial of Service Attacks. Thus, there is a dire need for banking to streamline their digital banking’s cybersecurity using potential technology to protect the data.

Blockchain is an infrastructural technology, can be used for the record-keeping process. It is the underpinning technology for digital currencies such as bitcoin, Ethereum etc. It is also called a decentralized distributed ledger. In this digital ledger, data only can be added up in the chain of blocks, cannot be removed. This feature makes it more challenging to corrupt the data and keeps data protected from being illicitly accessed by hackers. It can effectively mitigate cybersecurity risks and attacks through its security features. Since the blockchain has a unique decentralized network topology, it can support improving the resilience in cybersecurity from being exposed to compromise the single point failure. Blockchain transparency and security over every action provides the added level of reassurance that the data has not been mutable or hacked.

The technology behind existing digital banking is the advanced level of process automation and web-based services. It specializes in availing banking services at any-time and anywhere to the clients like balance inquiry, funds transfer etc., via intelligent devices such as smartphones, laptops, desktops. This digital banking technology can let one connect easily with third-party payment applications or integrated digital banking payment applications. At this juncture, security concerns are rising on the existing technology behind digital banking since it can easily expose to data breaches and hacking. The prevailing third-party or integrated digital banking payment applications are not secured with tamper-proof and un-hackable technology. Thus, it can easily expose itself to vulnerabilities such as malware attacks, ransomware etc., Hither, blockchain technology has a potential tamper-proof framework that could help secure digital transactions from data breaches and hackers. It can empower the banks to the greater ownership of customer data security. It can bring a new paradigm to digital banking cybersecurity through its security standards and procedures. The adoption of the blockchain for improving digital banking cybersecurity helps establish secure networks for protected data exchanges, which can assist in maintaining a high level of data integrity. Its cyber defence feature allows upfront the security parameters and assists in protecting the data in digital banking.

Accordingly, India must consider implementing the blockchain to scale up the current cybersecurity platform in digital banking. Since digital India is direct to intensify cashless transactions, the banks must have the primary concerns to strengthen their cybersecurity. Here, blockchain assists to improve the efficiency of digital banking by optimizing the entire digital banking operations. Many developed countries are likely to induce blockchain technology to improve the efficiency of cybersecurity. However, digital banking success has relied mainly on its cybersecurity. It creates trust among the customer to attain its feat. Hence, the blockchain can effectively act as a bolster through its security infrastructure by working against the threats in digital banking.

The article has been written by Gayathri Giri