July 19, 2016 By Sandeep Mukherjee 3 min read

According to professor Francis Amasa Walker’s definition for the function of money, “Money is what money does.” In modern times, especially for Indian banks, the function has changed: The money does what a banker allows it to do.

When I used to visit our local bank with my parents as a child, the bank manager used to meet and greet all the customers. Nowadays, customers don’t even have to visit a branch to carry out a transaction.

The digital world is catching up with the banking sector, and we now have various platforms and channels through which to interact with the bank. As a customer, I am concerned about one thing: Is my money safe?

Three R’s Vexing Indian Banks: Reputation, Regulations and Resources

As India moves towards a digital transformation, banks are also marching together to achieve digital goals. With the introduction of online banking, mobile banking, wallets and now transferring money via social channels, the need to ensure robust, 24/7 safety has become a major task for banks.

A cyberattack like the Bangladesh heist can push a bank way backward and raise questions about its security measures. Attackers are organized, highly skilled and determined to find loopholes in banks’ networks. A bank’s endpoints, applications and data are always at high risk and have to be scanned or monitored periodically to avoid breaches.

So what are the three enigmas Indian banks are facing in this cyber age?


Because you want access to your money 24/7, bankers are challenged to make sure channels are both accessible and secured. Security teams are rapidly adapting to the new transaction methods across branch, online and mobile platforms. Apart from the physical security of the branch, banking operations depend on virtual systems and advanced data centers. Banks are also gradually moving to cloud computing environments.

With these new breakthroughs come a fresh set of security, infrastructure, network and systemic challenges. Indian banks and those elsewhere in the world struggle with the challenges posed by online banking, para-banking, mobile banking and other digital platforms. With the Indian government’s launch of Digital India, banks are also working to create secure banking platforms while building end-to-end digital products and services for customers.

If a bank is attacked by cybercriminals, it may be forced to discontinue or block its operations to counter to the attack. Even if the bank is able to restore operations with minimal monetary losses, it stands to lose its credibility and its customers’ trust. Banks need robust security systems to ensure security, minimal downtime and customer data protection, as well as an automated mechanism to make sense of the data across environments and act upon it.


The banking system in India is regulated by the Reserve Bank of India (RBI) through the provisions of the RBI Act (1934) and Banking Regulation Act (1949), along with other acts such as the Companies Act (1956), Banking Companies Act, SBI Act (1955), Regional Rural Bank Act (1976), Bankers’ Books Evidence Act (1891), SARFAESI Act (2002) and Negotiable Instruments Act (1881). Additionally, banks must adhere to the PCI DSS and PA DSS regulations.

Though individual banks bear the primary responsibility for preventing fraud, RBI advised banks about major fraud-prone areas and necessary safeguards. With the increase in digital transactions from various platforms, these mandatory rules and regulations are vital to protect money and internal assets. Banks must also adhere to the Information Technology Act (2000) to make sure digital channels are secured to carry out the transactions.

Security teams in banks spend considerable time and effort to keep the environments secure and compliant. Security intelligence and event management (SIEM) solutions can help ensure compliance in a platform separate from the normal channels of communication. These solutions help banks monitor the environment to flag if any regulations are not being adhered to.


Skilled security professionals are scarce and in demand. Banks often lack the internal expertise and skills required to monitor and safeguard their crown jewels. Many are unable to invest the money or time required to cultivate the requisite skills to implement an effective security strategy.

Banks often seek a partner for IT security services that can protect their enterprise while reducing cost and complexity. From infrastructure and data and application protection to the cloud and managed security services, service providers have the expertise to help safeguard critical assets.

Digital Transformation Driving Bankers Bonkers

With the success of the Digital India campaign, it is evident that the country is transforming to a digital powerhouse. Security will be one of the integral topics being discussed in boardrooms. Indian banks must push toward an integrated strategy to secure platforms, channels and data around the clock.

With that in mind, Indian bankers might amend professor Walker’s quote about the function of money as follows: “Money is what money does. It makes bankers go bonkers.”

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