CYBER LIABILITY INSURANCE

 The frequency of cyber-attacks on financial institutions across the

world has drastically increased. There are varied reasons for his or her

increase and despite an equivalent we haven’t been keen of the

problems that this might cause . Cyber security breaches have

been a weapon of state warfare, terrorism, hacktivism and other

kinds of criminal breaches which we are unaware of. the straightforward and

affordable access to technology has led to extend in both

perpetrators and therefore the prey, increase in width of those attacks

easiest, being the financial institutions. to intensify this further

we have an enormous parallel black market to assuage which is relieved

by huge demand of the large data of which the financial institutions

are one stop repository. This brings us to crux of the aim of

this paper which begins with an issue . is that the Indian financial

services industry’s making enough efforts to stop cyber-crime,

protect consumers and therefore the organization from such breaches, and

if yes what are the steps, if no what's the safest way they need to

choose when there are even third party interests involved like

payment processors.

Introduction

The coming of the Core banking industry (CBS) and welcoming

environment of banking sector has led to fierce competition

among the peer banks both privately and public sector.

Electronification of payments and transactions is that the new lingo of

the banking system . In such a scenario, the Indian economy is

witnessing increased digital dependency and has changed the face

of retail transactions and market operations. Both the financial

service providers and therefore the end users are driven by the economic

and social benefits the e-transactions offer like efficiency,

increase in velocity of cash , customer satisfaction, lesser costs,

financial inclusion, easy accessibility and mobility of funds. The Bharati Law Review, April – June, 2017 13

current focus of the regulator is to evolve an interoperable and

integrated system for the advantage of consumers at large. This longterm project is clear in features of recent Indian banking like

debit cards, credit cards, net banking, mobile banking, RTGS,

NEFT, CTS, networking of all the banks etc. These steps have

reflected tremendous impact on the economy in terms of GDP (A

recent study of Moody’s Analytics in Feb, 2013 concluded that the

use of credit cards and debit cards, added $1.5 billion to GDP of

India).1

With all this because the background and a mixture of Internet along side a

government driven initiative like Digital India, an enormous mass of

consumer and financial services became more

interconnected, and in years to return this may only expand making

the word ‘data’, subsequent big thing of Gen-Now in terms of volume,

variety and velocity. This successively makes protection of this data i.e.

cyber security the new global industry challenge generally and

Indian banking economy especially . Today, the Indian banking

industry must gainsay cyber challenges by advancing few

measures like corporate governance around cyber security;

use and frequency of penetration testing and results; budget and

costs related to cyber security; the frequency, nature, cost

of, and response to cyber security reaches; and future plans on

cyber security.2

Cyber Insurance In India: Global financial challenge

A database of a bank may be a virtual goldmine and is that the quite

obvious target of cyber Online Fraud Prevention App fraudsters. It contains all possible details

of a customer and banks don't possess a self-run system to

counter cyber security threat and are often hooked in to third

party systems to supply e-financial security services including

an unaware consumer, who has limited knowledge about secure

transactions. This makes the database of a bank prey to cyber

security breaches directly and indirectly. Majority of medium and

large scale institutions have implemented the key pillars of cyber

security program: (1) a written information security policy, (2)

security awareness education and employee training, (3) risk

management of cyber-risk, inclusive of identification of key risks

and trends, (4) information security audits.