Threats in Online Banking

Abstract

Online banking, or internet banking, has revolutionized the financial landscape in India, providing customers with unprecedented access and convenience for managing their finances. However, this digital transformation has also given rise to a multitude of security threats and vulnerabilities, requiring a robust regulatory framework and advanced security measures. This study conducts a critical analysis of security of online banking focusing on the regulatory framework, security measures, and the challenges faced in mitigating these threats. The regulatory framework for online banking is primarily overseen by the RBI, with key laws including the B.R. Act, 1949, and the I.T. Act, 2000, providing the legal foundation. Measures of Security i.e. encryption and biometrics have significantly enhanced online banking security, with an evolving regulatory framework adapting to emerging threats. However, challenges persist, including the rapid evolution of threats, varying levels of customer awareness, and a seamless customer experience. Recommendations for enhancing security include strengthening regulatory oversight, intensifying customer awareness programs, and implementing advanced security technologies. This study concludes that while online banking in India has made significant strides in enhancing security, continuous adaptation and a commitment to user education are essential to ensure the sector remains secure and trusted in an ever-evolving digital environment.