Pakistan’s economic recovery hinges on cyber-security

Internet banking fraud is on the rise: can we fight fire with voice? Introduction: As Digitization is the new avenue of an economy, it’s a right time for us to align with digital requirements and accept the change with all its associated risks and mitigations of disadvantages.

Pakistan’s economy, though scarred by the early 2023 slump, is showing signs of gradual improvement. Compared to the previous year, inflation and other economic indicators are exhibiting a slow improvement, hinting at a potential upswing. However, for true progress, staying abreast of global growth trends is crucial.

Financial institutions, both banks and non-banks, serve as the backbone of Pakistan’s economy, acting as the “live of businesses” by providing credit, mortgages, and financing during crucial times. Individuals and businesses rely on these institutions to fuel their financial endeavors, creating a balanced economic ecosystem when external and internal stakeholder needs are met.

Recognizing the global shift towards digitalization, the State Bank of Pakistan (SBP) is urging its affiliates to adopt digital frameworks. This digitalization push offers numerous benefits, including curbing the black economy and expanding the tax net through a more transparently documented economy.

However, digitalization comes with its own challenges, including cyber-security threats, technology awareness gaps, user education needs, and policy loopholes. Thankfully, the SBP, through departments like BPRD, PSPOD, and CPD, is proactively issuing guidelines and circulars to safeguard the industry from potential risks.

As Iqbal, the revered poet, once said, “The ways of the world will change.” In today’s rapidly evolving digital landscape, Pakistan must adapt and embrace these changes in financial technologies. The time to act is now, lest we fall behind in the global race.

This article stresses that while digitalization is crucial for progress, addressing cyber-security threats is also equally, if not more, important for its success because digital fraud is a significant risk that could hinder the economic benefits of digitalization. Digital fraud can have a devastating impact on the economy in a number of ways. It can lead to financial losses for businesses and individuals, as well as damage to reputations. It can also erode trust in the financial system, which can discourage investment and economic growth.

Pakistan is particularly vulnerable to digital fraud because of its large and growing digital economy, as well as its weak cybersecurity infrastructure. The government of Pakistan is taking steps to address these risks, but more needs to be done to protect the economy from digital fraud.

Here are some of the steps that can be taken to reduce the risk of digital fraud:

Businesses and individuals should be aware of the risks of digital fraud and take steps to protect themselves, such as using strong passwords and being careful about what information they share online.

The government should invest in cyber-security infrastructure and training.

Law enforcement agencies should crack down on digital fraudsters.

By taking these steps, Pakistan can help to protect its economy from the risks of digital fraud.

Copyright Business Recorder, 2024