Research consultancy

CYBER SECURITY THREATS ON ONLINE BANKING OPERATIONS

ACASE OF EQUITY BANK, STANBIC BANK AND HOUSING FINANCE BANKS

CHAPTER ONE

INTRODUCTION

1.0 Introduction

This chapter presents the background of the study, problem statement, purpose of the study, research questions, study scope, and significance of the study.

1.1 Background of the stud

Cyber attacks have caused a lot of loses to countries and individuals in different measures according to IMF’s Global Financial Stability Report (Adelmann et al., 2020 ), In the past two decades, nearly one-fifth of reported cyber incidents have affected the global financial sector, causing $12 billion in direct losses to financial firms, and from 2020 to 20224 direct losses amounted to an estimated $2.5 billion (Alhayani et al., 2021).

Cyber attacks are currently one of the biggest challenges facing developing countries specifically Africa , though there has been a projected growth for African cyber security market , nations across the continent are loosing billions each year due to the increased cyber attacks, collectively African countries loose 4 billion Us dollars annually due to cyber attacks with specific countries like; Nigeria, Kenya, south Africa and Egypt lose more than $3.5b per annum as a result of digital attacks, Like many developing nations, Uganda has witnessed rapid adoption of digital technologies in recent years (Cinini et al., 2023), while this digital transformation brings numerous benefits, it exposes the country to new risks of cyber-attacks. Cybercriminals capitalize on weaknesses in cyber security infrastructure, exploiting individuals, businesses, and government entities for financial gains or other purposes and as of 2022 Uganda lost 19.2 billion to cybercriminals and in 2023, over 245 cases were reported to police countywide, bringing a 5 billion loss.

1.2 Problem statement

The banks globally face a multitude of loses as a result of cyber criminals the size of these losses has more than quadrupled since 2017 to $2.5 billion (Natalucci, Qureshi, & Suntheim, 2024). Africa and Uganda in particular are no exception, and as of 2022 Uganda lost UGX19.2 billion to cybercriminals and in 2023, over 245 cases were reported to police countywide, bringing a UGX 5 billion loss (Daily monitor, Friday, April 05, 2024), in the banking industry direct and indirect loses like reputational damage or security upgrades are substantially higher, it is against this background that this study intends to investigate into cyber security threats on online banking challenges, acase of equity bank, stanbic bank and housing finance banks

1.3 Objectives of the study

To examine the influence of external threats on online banking operations.
To investigate the influence of internal threats on the online banking operations.

To determine the relationship between user technical awareness on online banking operations.

1.4 Research Questions

What is the influence of external threats on online banking operations?
What is the influence of internal threats on the online banking operations?

What is the relationship between user technical awareness on online banking operations.

1.5 Scope of the study

This section will include the content, time and geographical scope;

1.5.1 Content scope

The contents of the study will include; the influence of external threats , the influence of internal threats and the relationship between user technical awareness on online banking operations.

1.5.2 Geographical scope

The study will investigate the banking sector specifically the banks equity bank, Housing finance Bank and stanbic Bank

1.5.3 Significance of the study

The study will provide information to the future scholars on the influence of external threats on the vulnerability of the banking sector.

The study will also provide information on the influence of internal threats on the vulnerability of the banking sector.

The study will provide information to the future managers on the relationship between user technical awareness on vulnerability of the banking sector

Conceptual Frame Work

Cyber security threats (I.V) Online Banking operations (DV)

Mediating variables

CHAPTER TWO

LITERATURE REVIEW

2.1 External threats on online banking operations.

The rise on the use of information technology in banking industry has exposed the financial institutions to different levels of cyber attacks , this is because it has opened opened new methods of security breaches. Every advancement has brought new challenges into the financial landscape (Gulyas, & Kiss, 2023).

New technologies, such as cloud computing or mobile banking, have to face expansive attack attempts from different agents on many levels (Hasan, & Al-Ramadan, 2021). The attackers target vulnerabilities that can be exploited to steal customer data, this therefore indicates that it is important for banks to constantly adopt new security cyber strategies to ensure the security of their customers, their assets, and their data (Berdyugin, & Revenkov, P2019).

Since the introduction of Automatic teller cards (ATM) there are many online credit card frauds which are made when a customer use their credit card or debit card for any online payment , during this transactions normally hackers get information from the ATM cards and are able to manipulate the system and get the password of the client and misuse of it for online purchase for which the customers card used after the hackers have access to the clients’ card number and password, they impersonate the credit card owner when electronic transactions are not secured (Omotosho et al., 2023).

2.2 Internal threats on the online banking operations

Banking industry mainly in developing countries are prone to high risks orchestrated by use sometimes of outdated software that is vulnerable to hackers, therefore reducing the risk of these attacks requires organizations to be in position to update their organization softwire’s to one which is difficult to the hackers to compromise (Hasan, & Al-Ramadan, 2021).

Use of out-dated computer hardware’s , which can be easily compromised , more to that these old hardware’s are not compatible with the new existing software’s that could have the ability to prevent hacking (Alhayani, Abbas, Khutar, & Mohammed, 2021), This can lead to errors, crashes, slowdowns, or even data loss, The integrity of information systems and data could be threatened due to errors and omissions, which is usually occurring during the capture of data (Alzoubi et al., 2022).

2.3 User technical awareness on online banking

Some times employees in the organization with no technical skills may cause data breaches something that could expose the financial institution at risk of cyber attacks , like for examples a former employee of wells and fargo on December 31, 2021, e-mailed files containing private information from Well’s Fargo’s servers, this kind of practice exposes the financial institution on to cyber criminals who after accessing a customer sensitive data are able to access their bank accounts (Ibrahimnur, 2023).

The data breaches in the financial industry are extremely high that even the health sector is far behind the findings from the Verizon’s data breach investigation report (DBIR) places the financial industry in the top five for the number of security incidents in 2021. Access to valuable data that can be used in fraud and other cyberattacks makes the financial industry a target for expensive and damaging data breaches (Sipayung, Yanti, & Setya, 2022 ).

CHAPTER THREE

METHODOLOGY

3.0 Introduction

This chapter presents the methodology which consists of the research design, area of study, study population, sample population and selection, sampling technique, data collection method, data quality control, data collection procedures and limitations of the study.

3.1 Research design

The study will use descriptive research design. The design will avail the researcher with comprehensive information about the research study as a way of getting solutions..

3.2 Area of the study

The study will be carried out at Head office of Equity Bank, stanbic and Housing finance bank.

3.2 Study population and sample size

The study will target, credit officers, management staff and top management in these banks.

3.3 Sampling techniques

The study will use simple random sampling technique to select respondents, while the purposive sampling technique will be used for selecting top management.

3.4 Data collection methods

Source of data will be from both primary and secondary sources.

3.5 Data Collection Instruments

The major instruments for data collection will be questionnaires and interview guide. The questionnaire will provide respondents with ample time to comprehend the questions raised and hence, they will be able to answer factually.

3.6 Data collection procedures

Upon receiving the University permission to carry out research, the area of study will be visited for purposes of familiarization.

3.7 Quality control of data instruments

The instrument will be taken to the supervisor to check its correctness there after pilot study will be carried out to find out if it measures what it is meant to for.

REFERENCES

Adelmann, F., Ergen, I., Gaidosch, T., Jenkinson, N., Khiaonarong, M. T., Morozova, A., … & Wilson, C. (2020). Cyber risk and financial stability: It’sa small world after all. International Monetary Fund.

Alhayani, B., Abbas, S. T., Khutar, D. Z., & Mohammed, H. J. (2021). Best ways computation intelligent of face cyber attacks. Materials Today: Proceedings, 26-31.

Alzoubi, H. M., Ghazal, T. M., Hasan, M. K., Alketbi, A., Kamran, R., Al-Dmour, N. A., & Islam, S. (2022, May). Cyber security threats on digital banking. In 2022 1st International Conference on AI in Cybersecurity (ICAIC) (pp. 1-4). IEEE.

Cinini, S. F., Ehiane, S. O., Osaye, F. J., & Irewunmi, B. A. (2023). The Trends of Cybersecurity and Its Emerging Challenges in Africa. In Cybercrime and Challenges in South Africa (pp. 75-106). Singapore: Springer Nature Singapore.

Gulyas, O., & Kiss, G. (2023). Impact of cyber-attacks on the financial institutions. Procedia Computer Science, 219, 84-90.

Hasan, M. F., & Al-Ramadan, N. S. (2021). Cyber-attacks and cyber security readiness: Iraqi private banks case. Social Science and Humanities Journal (SSHJ), 2312-2323.

Ibrahimnur, A. A. (2023). Impact of Cybercrime on the Finance Sector: a Case of Banks in Nairobi County, Kenya (2008-2022) (Doctoral dissertation, University of Nairobi).

Sipayung, E. S. N., Yanti, H. B., & Setya, A. B. (2022, December). Impact of Anti-Fraud Awareness, Fraud Detection Procedures, and Technology to Fraud Detection Skill. In 3rd Borobudur International Symposium on Humanities and Social Science 2021 (BIS-HSS 2021) (pp. 783-787). Atlantis Press.