Financial Crime World

Cybercrime Remains Growing Concern for Malaysia’s Banking Sector

Threats to the Industry

The banking industry in Malaysia is facing a rising threat from cybercrime, with new ways to scam and fraud people emerging continuously. Despite efforts to combat this problem, the lack of talent in the field of cybersecurity remains an acute issue in the financial services sector, making it challenging for financial institutions to operate in a secure environment.

The Impact of Innovation

Innovations such as cloud services and artificial intelligence will only heighten cybersecurity risks in the future, despite rising customer expectations for better security and safety. It is essential for cross-organisational and cross-border cooperation to address the seamless world of cyberspace, where coordinated surveillance and assessment are crucial for effective risk mitigation and successful prosecution of perpetrators.

The Role of Customers and Banks

Customers themselves remain the best defense against scammers, but banks must also play a bigger role in keeping them informed and aware of potential private data breaches and scam tactics. Kenanga Research noted that while financial institutions have reported on their data privacy and cybersecurity efforts in their annual reports, consistency between them could be improved.

The Importance of Transparency

The research firm has an “overweight” call on the banking sector, believing its resilience is underappreciated amidst looming market-wide concerns. However, it proposed that disclosures include more transparency and numerical emphasis to enable a more comprehensive perception of the sector’s cybersecurity posture.

Specifically, Kenanga Research suggested including:

  • Frequency of cyber risk incidents
  • Timeliness of resolution
  • Financial losses incurred

in future disclosures. While this information may be sensitive to reputational risks, the research firm believes it is essential for investors and customers to have a better understanding of the banking sector’s cybersecurity posture.