Financial Crime World

Cybersecurity Risks Haunt Nepal’s Finance Sector

Nepal’s finance sector has been rapidly transitioning towards digital payments, with mobile banking, debit cards, and e-wallets accounting for 66% of total transactions. However, this growth has also introduced new cybersecurity threats that need to be addressed.

The Rise of Cybersecurity Risks

With over 72% of the population owning mobile phones, these devices have become instrumental in promoting financial inclusion. The surge in access to finance through digital channels has been accompanied by the adoption of payment methods like debit cards, mobile wallets, and QR codes. However, this rapid transition towards digital payments has also introduced new threats, making the safeguarding of digital assets an integral aspect of national security.

Common Cybersecurity Threats

  • Phishing attacks
  • Malicious software
  • Denial-of-service attacks
  • Man-in-the-middle attacks
  • Social engineering

The Need for Robust Cybersecurity Measures

To mitigate these risks, banks must implement a comprehensive framework that identifies, assesses, prioritizes, and monitors IT risks. This framework should align with regulatory requirements and industry best practices.

Essential Components of a Robust Cybersecurity Strategy

  • Regular vulnerability assessments
  • Layered security approach involving:
    • Firewalls
    • Intrusion detection systems
    • Access controls
    • Encryption
    • Data loss prevention solutions
  • Automation tools for tasks such as:
    • Patching
    • Configuration management
    • Incident response
  • Leveraging data analytics for proactive detection and response to threats

Building a Strong Cybersecurity Foundation

To ensure the confidentiality, integrity, and availability of financial data, Nepal’s finance sector needs to prioritize cybersecurity. This can be achieved by:

Key Steps to Mitigate IT Risks

  • Building a team of skilled cybersecurity professionals
  • Keeping employees informed about recent threats in the international market
  • Conducting periodic third-party IT security audits
  • Ensuring compliance with industry-specific regulations like PCI-DSS and Basel III