Cyber crimes on the rise; but how ready are financial institutions?

Cyber crime is a growing threat globally and the second most commonly reported economic crime affecting financial-services firms.According to a report by PricewaterhouseCoopers (PwC) LLP Global Economic Crime survey released last year, cybercrime has risen up the ranks over the last couple of years.The survey states that cybercrime accounts for 38 per cent of economic crime incidents compared to 16 per cent for other industries.The survey analysed 3,877 responses spanning 78 countries across the globe, with 23 per cent of those (878 respondents) coming from the financial sector. In Rwanda, police statistics also indicate that in 2011, about several cases of cyber related crimes were registered. Last year, the Rwanda National Police arrested 76 suspects in connection with the theft of Rwf1.2 billion from 12 banks. Some of the cases were cyber related crimes.Another report released last month by Centre for Strategic and International Studies (CSIS), said global cyber activity is costing up to $500 billion each year, which is almost as much as the estimated cost of drug trafficking.The global threat is giving financial institutions a hard time and posing a serious threat to the world’s economy. The fight Like any other developing economies the world over, Rwanda is turning the spotlight to cyber security risks that are threatening the financial sector by putting in place robust mechanisms against the attacks.For example, the National Bank of Rwanda has set up a division dedicated to monitor the possibility of any economic crime cyber attacks.“The department staff has been trained and empowered to do research on the latest cyber crime threats,” Justin Rurazi, the director of Information and Communication Technology at the central bank said, adding; “We are also in the middle of an internal cyber security awareness campaign.”BNR, according to Rurazi, has built a strong infrastructure that helps to prevent and detect any cyber-crime related threats.“We have not encountered any threat at the central bank, but this will not stop us from laying strategies to prevent the attacks. We are also planning to share the information with commercial banks and also look at how they are responding to the growing pressures of having robust preventative and detective controls in place,” explained Rurazi.And local banks have not been left out. Maurice K. Toroitich, the managing director of Kenya Commercial Bank, Rwanda, said it is time for the financial sector to enhance internal intelligence system by identifying possible sources of cyber crimes and putting in place mechanisms to detect the threats. “You cannot prevent cyber crimes from happening; the more important thing is how to prepare your people to know the threats and how to detect them,” he added. Toroitich said KCB is investing considerably in the fight against cyber attacks by updating the management systems and training the staff charged with monitoring the situation. “Economic cyber criminals are very clever and cosntitute a major threat. We have not encountered any hacking into our system, but have experienced automated teller machines robbery.” In this digital era, some of the developing technologies such as using ‘apps’ to access banking services and mobile phones to make payments are likely to increase, rather than decrease, the economic crime cyber risks.This is because the financial sector remains hugely attractive to criminals.Awareness campaigns According to Youth and ICT minister, Jean Philbert Nsengimana, Rwanda’s approach is more on prevention than actually fighting the crime. “We are carrying out awareness campaigns on emerging cyber threats and building the capacity to respond to the attacks in case they occur,” he said, noting that effective prevention is the only solution to minimise cyber costs brought about by hacking which continues to grow in size and intensity. The 2013/2014 Budget allocation to the ICT sector saw billions of francs set aside to establish a front line of defence against the immediate threats resulting from digitised economy.The consequences of cyber attacks include, among others, leaking national security confidential information, destroying research materials with no backup and sale of trade secrets to competitors. In the US alone, it is estimated that cyber crime is the catalyst behind the loss of as many as 500,000 jobs as companies struggle with the loss of coveted intellectual property, confidential strategies that are snooped on, and suffer reputational harm.Multinational companies such as Google, Facebook , Apple and The New York Times Co. have been victims of economic cyber crimes.