Security Measures in Electronic Banking (Chapter 6)

Security Measures in Electronic Banking

• Authentication verifies user identities to ensure they are who they claim to be
• Authorization controls access to resources based on user identity and permissions
• Authentication methods include:
  • Username and password
  • One-time passwords (OTPs)
  • Smart cards
  • Biometric authentication (e.g., fingerprint, facial recognition)

Encryption and Cryptography

• Encryption protects data in transit by converting plaintext to ciphertext
• Cryptography involves encrypting and decrypting data using algorithms and keys
• Types of encryption include:
  • Symmetric encryption (e.g., AES)
  • Asymmetric encryption (e.g., RSA)
  • Hash functions (e.g., SHA-256)

Secure Socket Layer/Transport Layer Security (SSL/TLS)

• SSL/TLS encrypts data in transit between clients and servers
• HTTPS uses SSL/TLS with HTTP to secure web traffic
• SSL/TLS versions include:
  • SSL 2.0 and 3.0 (deprecated)
  • TLS 1.0, 1.1, 1.2, and 1.3

Firewalls and Network Security

• Firewalls control incoming and outgoing network traffic based on rules
• Network segmentation divides networks into smaller, isolated zones
• Intrusion Detection Systems (IDS) and Intrusion Prevention Systems (IPS) monitor network traffic for anomalies and malicious activity

Secure Electronic Transaction (SET) Protocol

• SET is a protocol for secure online transactions
• SET features include:
  • Authentication and authorization
  • Encryption and digital signatures
  • Payment processing and verification

Risk Management in Electronic Banking

Risk Management Process

• Identify risks: Determine potential threats to electronic banking systems
• Assess risks: Evaluate the likelihood and impact of identified risks
• Prioritize risks: Focus on high-impact, high-likelihood risks
• Mitigate risks: Implement controls and countermeasures to reduce risk
• Monitor and review: Continuously monitor and review risk management process

Risk Assessment Techniques

• Qualitative risk assessment: Subjective evaluation of risk based on expert judgment
• Quantitative risk assessment: Objective evaluation of risk using numerical data
• Hybrid approach: Combines qualitative and quantitative techniques

Risk Mitigation Strategies

• Deterrents: Implement security measures to prevent attacks (e.g., firewalls, access controls)
• Detectives: Implement monitoring and detection mechanisms to identify attacks (e.g., intrusion detection systems)
• Correctives: Implement incident response plans to respond to attacks (e.g., disaster recovery plans)

Risk Management Frameworks

• NIST Cybersecurity Framework: Identify, Protect, Detect, Respond, Recover
• ISO 27001: Plan, Do, Check, Act (PDCA) cycle for information security management

Challenges in Electronic Banking Risk Management

• Regulatory compliance: Adhering to multiple regulations and standards
• Technological advancements: Keeping pace with emerging technologies and threats
• Human factors: Addressing user errors and social engineering attacks