Comprehensive policy needs to be developed to isolate cyber crooks, mafia and hackers in order to isolate Indian financial markets.
Even as the RBI prepares its plans to launch the digital rupee later this year, the government and banking regulator will need to focus on protecting India’s economy from cyber fraud, corruption, and securing the country’s financial interests.
Strengthening economic security in the cyber world would be a prerequisite for further opening up of monetary space through digital instruments. Given the cynical innovation of cyber attacks that have been reported around the world, extending firewalls is the only option while making financial transactions easier for consumers.
In addition, the introduction of digital currency would bring new vulnerabilities to fraudsters and possible instability that security breaches could bring to the economy. Reports have indicated that at least 900 Indians have been scammed over Rs 1,200 crore in an initial public offering of a non-existent cryptocurrency called “ICO”. This is just the tip of the iceberg in the world of economically cybercrime.
While vetoing the proposal to introduce private cryptocurrencies, these concerns and the impending economic malaise were signaled by the country’s central banker and RBI Governor Shaktikanta Das.
Finance Minister Nirmala Sitharaman will succeed in deploying a policy aimed at protecting India’s economic and financial interests in the cyber world. The Union budget which will be presented on February 1 should launch such a political framework. Securing the financial ecosystem is all the more important as more and more transactions are carried out online. According to data released by the National Payments Corporation of India (NPCI), as of December 2020 alone, over 4.56 billion transactions involving Rs 8.27 trillion (Rs 8.27 lakh crore) went online through the payment interface. unified or UPI.
Much like the cryptocurrency consultations led by Prime Minister Narendra Modi, a multi-stakeholder meeting on securing India’s economy in cyberspace is expected to be launched immediately.
According to the Indian Computer Emergency Response Team (CERT-In), cybercrime is on the rise in India. Until June 2021, cybercrimes in Indian financial markets amounted to 6.07 lakh. In the previous year, around 11.58 lakh of cybercrime was committed while thousands of such cases went unreported. The rise in tech-related fraud was a fact, as such cases more than doubled in two years from the 3.94 lakh reported in 2019.
In terms of value, more than $ 300 billion in transactions representing around 18% of consumer GDP in 2021 have been estimated by independent capital markets and investment advisory group CLSA, based in Hong Kong.
According to projections by CLSA, online transactions are expected to reach between 900 and 1000 billion dollars by 2025-2026. This is a huge leap given that online transactions accounted for around $ 61 billion, or just over 6% of consumer GDP in 2015-16. This can include banking, non-banking, and all financial market transactions including stocks, commodities, bullion and real estate, etc., except corporate transactions.
Another set of figures available is available in the 2021 report from PwC India and the Data Security Council of India. According to the report, the value of digital payments in India is expected to grow by 20.2% per year, from around US $ 64.8 billion in 2019 to US $ 135.2 billion in 2023.
Given the enormous stakes, India will need to develop a comprehensive policy framework against cybercrime in the economic space. For starters, a war room may need to be set up like the Modi government did to deal with hardline, expansionist and unreasonable neighbors like China and Pakistan.
In the RockYou 2021 cyberattack that occurred in June of last year, an estimated 8.4 billion passwords were broken, wreaking havoc on economic structures and consumers around the world. In a similar attack in 2009, around 32 million online accounts were compromised.
This is not the first time that a large-scale hack has unleashed humanity and has the potential to destroy businesses with billions of dollars by hackers and unethical operators. WannaCry Ransomware, one of the biggest attacks of 2017 compromised over 200,000 computers in 150 countries, having a devastating impact across multiple industries. It cost global markets a whopping six billion pounds in just a few days.
Let us not forget the hack of Yahoo servers which led to the compromise of 500 million accounts while no banking information was stolen. But, Adobe’s cyber attack in 2013 was different, as more than 2.9 million credit card user information was stolen, personal data of 38 million users fell into the wrong hands. .
Since all industries, banks and financial markets operate in cyberspace, the latest and most innovative cybercrimes risk putting billions of dollars at risk. The Covid 19 pandemic in its third and fourth waves over the past two years has brought most industry and service operations online, exposing itself to fraudsters like never before.
The same goes for governance in states and the center where key issues have been discussed in chat rooms or private online conference rooms that face attacks and are infiltrated continuously.
Exponential digital growth, increasing cyber attacks, and strict regulatory mandates have put India’s economy and financial markets in dire straits.
With an economy looking to grow in double digits and half a billion people on the information superhighway, cybersecurity must be a priority for frauds, online mafia, and hacking gangs.
(The author is a senior journalist, director and CEO of the New Delhi-based think tank, Center for Integrated & Holistic Studies)