E-banking transactions value cross Rs5.8 trillion in 1QFY12

Muhammad Kamran Shehzad, Deputy Governor State Bank of Pakistan (SBP) Tuesday urged the need for exercising constant vigilance to ensure safety of the financial system in the country where the overall e-banking transactions had climbed to around 59 million involving over Rs5.8 trillion ($67 billion) by the end of first quarter, July-September FY12. Delivering his keynote address at the 7th International Information Security Conference (InfoSec 2011) at a local hotel, the deputy governor said banking network in the country was providing services to a vast population through effective use of the Alternate Delivery Channels.

Branchless banking

“At present, the banking network of the country of more than 10,000 branches had over 7,000 Real-Time Online Bank Branches; 4,800 ATMs and over 40,000 Point of Sale Machines,” he said. In addition to these technology-driven access points, the central banker said, the use of alternate modes of payments had also gained popularity. He said there were over 1.3 million credit cards and 11 million debit cards in circulation. “On an overall basis, around 59 million e-banking transactions with an amount in excess of Rs5.8 trillion ($67 billion) have been conducted till this quarter,” Kamran said. He said structured, well-defined and documented security policies, standards and guidelines were the cornerstones for good information system security. Kamran said each institution was required to define, document, communicate, implement and audit information security to ensure confidentiality, integrity, authenticity and timely availability of information.

Systematic efficiency

The deputy governor said the deployment of IT in financial institutions had helped in attaining better systematic efficiency while at the same time introduced new areas of risk and threats apart from the risk inherent in the traditional banking and financial activities. “The survival and growth of financial institutions and business largely depend on the security infrastructure deployed by them for ensuring the accessibility, quality, adequacy and integrity of their information and information systems,” he added. Kamran said, “The need for tighter and vigilant information security controls assumes greater importance in view of the prevalent security environment of the country. We cannot afford to be complacent in exercising rigorous risk management protocols in today’s fast paced technology-based business environment and banking without strong security architecture, effective disaster recovery and business continuity plans as these can have severe consequences for a business”.
Protecting information

The SBP deputy governor said the security procedures for protection of information resources would require the identification and assessment of risks and the development of proper controls to offset and reduce potential threats. Kamran said a small network interruption or data error could cause huge losses for a business apart from the loss of reputation and trust of the customers. “Therefore, financial institutions engaging in any form of e-banking should have effective and reliable methods to protect their information and their customers from data loss and identity thefts.” The SBP deputy governor emphasized that financial institutions should address, among others, the security issues related to unauthorized access to information and information systems, loss/modifications/ manipulations of data, loss of confidential information, problems inherent in an open network and disaster recovery plans while deploying technology-based delivery channels.

Customer-centric models

He said the banks were shifting from their traditional product-centric model to customer-centric model. The central bank continued to issue guidelines and instructions to banking sector in line with the best international practices to facilitate the optimum use of technology in their day-to-day working, he said, adding presently, the banks had been using electronic and telecommunication channels to deliver a wide range of products and services to their customers. “Technology enables them to create new products, exploit market opportunities and develop information and system oriented practices,” he said. The SBP deputy governor said branchless banking was expanding gradually with the participation of stronger players. Presently, the agent network under the umbrella of branchless banking had exceeded 18,000 agents who had facilitated around 38 million transactions amounting to Rs 190 billion.