January 16, 2023
Nowadays, it is very important to ensure secure transmission of financial information especially during cross-border money transfer. India has witnessed an exponential increase in remittances from around the globe making it one of the largest recipients of remittances globally. Financial transactions must be encrypted before being sent over the Internet. It’s crucial in financial transactions such as transfer money to India where there is a lot of money at stake and high potential for cybercrime.
There are few important details you need to know:
It is not only about regulatory compliance but also a way of enhancing trust when effecting money transfers to India. Customers will want to know that their financial information is safe during all the transactional processes. Financial institutions and remittance services spend much on encryption technologies for client data protection, thus improving on their reputation and attracting more customers.
However, the cyber-threat landscape keeps changing all the time necessitating new encryption technologies designed to mitigate these risks. Software for quantum computing is one example of future threats to prevalent encryption practices. This has prompted researchers and technologists to work tirelessly in developing sophisticated encryption techniques like quantum encryption which can outsmart potential risks.
Customer awareness and behaviour also play a vital role in making data encryption effective for securing money transfers to India. It therefore becomes necessary to train customers on how they can protect their devices as well as use strong unique passwords. Phishing scams are one major threat where people are tricked into giving away sensitive information. But then again, here alone encrypting does not guarantee against fraud in case users unconsciously compromise with their own data.
The Indian market was affected by notable breaches in financial institutions. A case in point is the Cosmos Bank incident which occurred in August 2018 during which nearly Rs. 94 crores was transferred from bank accounts of customers through an ATM server hacked and then syphoned to different account numbers that were opened across 28 countries using compromised Visa and Rupay debit cards with over 14,000 transactions. The second event happened last month when hackers got into the Canara Bank’s ATM network in Kolkata and stole nearly Rs. 20 lakhs from several accounts, revealing that there is a dire necessity for improvements in the security arrangements available within the finance field including meaningful encryption standards to protect it against such ingenious cyber-attacks.
A global standard for financial security known as the Payment Card Industry Data Security Standard (PCI DSS) is designed to secure cardholder data. Even though there was no direct mention of specific regulations on remittances to India from these sources, PCI DSS’s worldwide scope requires that financial institutions operating or transferring money into India should observe them for the effective protection of the customers’ information. It is of particular importance because such cyber-attacks on some case studies highlighted herein were aimed at banks and payment processors with significant weak points in their systems.
To enhance Cross-Border Money Transfers into India’s cybercrime defences, financial institutions must stay updated with emerging threats in cybersecurity and adhere to globally recognised standards like PCI DSS. Moreover, it is essential to deploy advanced encryption standards (AES) besides considering the possibilities of future technologies such as quantum computing towards resilient encryption capabilities.
As a result, the importance of data encryption is increasing with the surge in money remittances to India, which needs to be ensured for secure and private financial information transfer. Governments, financial institutions, technology providers, and users must be charged with the responsibility of ensuring safety in an increasingly interconnected digital financial world. The current levels of encryption provide a strong protection against cyber threats but as technology and cybercrime continue to advance there is need for an aggressive response towards data security.
