Cybersecurity for E-Banking and E-Commerce in Pakistan: Emerging Digital Challenges and Opportunities

Cybersecurity for E-Banking and E-Commerce in Pakistan: Emerging Digital Challenges and Opportunities

Tansif ur Rehman
DOI: 10.4018/978-1-7998-6975-7.ch009
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Abstract

Digital banking allows banks to make their new products more readily available, as they can package them with their essential software that has implications for cybersecurity. Internet presence also allows banks to extend their geographical reach without overbearing costs. In Pakistan, most internet offerings currently used by banks are more based on information than transactions; therefore, the issues for cybersecurity have gained high interest. The offerings on the websites by banks generally seem like electronic brochures. As they mainly offer company events, product information, along with a list of services rendered. Pakistan has various barriers to e-commerce, such as relatively few internet users, inadequate infrastructure (i.e., frequent power failures, fewer phone lines), and lack of cybersecurity for online transactions being hacked. The Government of Pakistan is rigorously working on these areas to overcome respective problems and progress in this sphere. This research focuses on the challenges for e-banking and e-commerce in Pakistan and issues relating to cybersecurity.
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Introduction

Cybersecurity breaches have opened new digital challenges and threats for banks and their customers. Increases in cyberattacks is creating an unsafe digital environment. Electronic payment systems enable banks' customers to transact via internet-supported websites and banks of banks, known as electronic banking or net banking. It provides online access to banks if they have the means for it. Moreover, it offers different services, such as money transfer, bill payment, account verification, e-shopping, and recharges. Online banking has notched its position since it operates in terms of ease and expediency, offers quick connectivity, cost-effectiveness, and could be performed anywhere. Internet also has offered hackers with easy access to exploit cyberspace for illegal activities. Shad (2019) suggests that cyber power depends on cybersecurity readiness —preparedness level against cyber threats —otherwise it transforms into cyber vulnerability. The author further argues that Pakistan faces wide-ranging cyber threats while it increasingly makes use of internet technologies but it seriously lacks in cyber readiness.

There exist many kinds of banks, viz., commercial, investment, private, and public. However, all have the same purpose of providing services relating to customers, enterprises, businesses, and government money as a vital prerequisite. Banks vary from lending and funding real estate and automobiles to major trade-relating deals in the contemporary era. Internet banking involves customers realizing the most varied banking practices that are not carried out within physical banking outlets. Such businesses range from conventional banking to mobile gadgets and are usually performed through the internet in which cyber-attacks are on the rise. Khan & Anwar (2020) in a study focuses on the cybersecurity framework present in Pakistan while reporting the key policy options for the state of Pakistan to deal with serious cybersecurity issues is the actual matter of concern?

Internet banking technology in the Asian region, especially in Pakistan, is comparatively less developed than in the Western world because of specific reasons. Full consideration of future e-banking in Pakistan would undoubtedly demand an investigation in various pertinent areas. The Electronic Transactions Ordinance was promulgated in 2002 to facilitate e-commerce in Pakistan, and it provided legal coverage to electronic transactions (e-Transactions). It also gave importance regarding Public-Key Infrastructure (PKI), which is software encryption technologies and services combination. It enables various enterprises to protect their communications and business transactions to a maximum extent on the internet.

In early 2000, the Government started an information-technology (I.T.) and e-commerce initiative. The banks were expected then to lead the way into e-commerce, respectively. However, the banking sector has been one of the leading spenders on information communications technology (ICT). Most progress in the e-commerce sector has been in e-government. Though some business-to-business (B2B) portals are available, they are designed more for information than facilitating transactions. There has been remarkable progress in the growth of e-commerce in Pakistan. In Pakistan, Internet users are growing fast, and internet access expanded from 29 cities in August 2000 to more than 6500 cities and towns by November 2018. Previously, optical fiber networks were only available in major cities, but now the respective networking is expanding exponentially.

Almost all renowned banks have equipped themselves with the latest technology significantly pertinent to enhance their services and have provided e-banking facilities to their customers. Now, customers can access their accounts without being physically present at their banks. Banks are offering more and more facilities to facilitate their customers with ease and convenience regarding e-banking. However, in Pakistan, this is not the case. As people still refrain from using e-banking in Pakistan because of various issues. The e-banking sector has exponentially grown in the last decade, and it has more chances of growth as organizations like banks still encourage clients to carry out e-transactions, like utility bill payments, access to account information, and money transfer.

Most of the prior studies have frequently focused only on the positive aspects of e-banking, e.g., advantages, trustworthiness, and innovations. This research will help banks formulate appropriate strategies to ensure customers' rapid migration to online banking, thus booming this self-service technology more efficiently and conveniently.

Key Terms in this Chapter

E-Commerce: Transactions conducted on the internet.

E-Banking: Online banking, i.e., via the internet.

Telecommunications: It is the exchange of information over significant distances by electronic means.

Banking: The services offered by a bank.

Remittance: A transfer of funds by an expatriate to his country of origin.

Barriers: Obstacles that cause hindrance.

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