Cyber Security and the Future of Money

Cyber Security and the Future of Money

The world is on the brink of witnessing dramatic makeovers in money and finance that will rewrite how they function in people’s lives.  In cybersecurity, the financial sector has long been playing the leading role.  The same goes for pan-industry info sharing and teamwork.

Still, financial bodies and market infrastructures have continued to suffer cyber-attacks.  Worse still, these attacks are growing more frequent and more sophisticated.  And so it has prompted investments in security to grow ever-larger, with an increased focus on how to mitigate and manage cyber risk.  

Some believe that blockchain technology is a strong means of tackling these growing cases of attacks.  Given, in a blockchain system, it is an extremely tough task for swindlers to mine customers’ info.  This is because it is decentralized.  Being so decentralized, it is distributed across a network of computers, forming a sort of digital ledger.  Going by that, blockchain tech can hold a highly accurate and strong record of transactions.

Cyber Security and its Importance

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What is cybersecurity?  Well, now and then, internet-connected systems like hardware, software, and data get attacked and hacked by dubious people.  The constant fear of such attacks is called cyber-threats.  It is the protection from cyber threats that are called cybersecurity.  

And as regards its importance, both individuals and enterprises use cybersecurity to forestall unauthorized access to their computerized systems.  A cybersecurity strategy is usually put in place to provide security against malicious attacks that try to access, alter, delete, destroy, or extract sensitive data.  

It is also used to keep off attacks aimed at disabling or disrupting the operations of a system or device.  Data, most sensitive and/or confidential, keep piling up!  And because cybersecurity is the protection for such, its importance continues to grow.  Also, the volume and complexity of cyber attackers and their attack techniques continue to advance!  So cybersecurity is of great importance.

Benefits of Cybersecurity

The benefits of cybersecurity include:

  • Protection against cyber-attacks and data breaches.
  • Data/network protection.
  • Unauthorized access prevention.
  • Superior post-breach recovery time.
  • End users and endpoint devices protection. Etc.

Types of Cybersecurity threats

It is not easy to keep up with new techs, security trends, and threat intelligence.  Worse yet, threats take many forms!  For that reason, the task is a very challenging but highly necessary one.   Sensitive info and other assets need to be protected from cyber threats.  We already said the threats take many forms.  Here now are some of the forms:

Malware: Malicious software with files or programs that can be used to harm a computer.  Examples are worms, viruses, Trojans, and spyware.

Ransomware:  A kind of malware.  With it, an attacker locks the victim's system files via encryption and demands payment to decrypt and unlock the system.

Social Engineering: This attack uses human interaction, tricking users to break security protocols and gain access to sensitive protected info.

Phishing: This comes via sham email or SMS that resemble those from reputable sources.  Often, the intent is to steal sensitive data, like credit card or login info.

Spear Phishing:  Phishing attack having a target user, organization, or business.

Insider Threats: These are human-caused breaches, employees, contractors, or customers.

Distributed Denial-of-service Attacks: Here, many other systems upset a targeted system’s traffic, like server, website, etc.  Attackers simply flood a target with messages, connection requests, or packets, to slow or crash the system, blocking valid traffic from coming.

Advanced Persistent Threats: These are lengthy targeted attacks where an attacker infiltrates a network and hides there, aiming to steal data for long.

Man-in-the-middle Attacks:  Here, attackers eavesdrop, intercept, and relay messages between other parties who would believe they are the ones communicating with each other.

Future of Money

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Traditionally, people have a strong emotional attachment to physical cash.  They deposit their physical cash in banks, with reassurance from the banks that the interest their money would earn for them would keep them comfy for life.

A promise the banks couldn't as interest rates have been woefully trifling for so long!  And when you add the biting effects of inflation, people’s buying power has gradually eroded.  And with it a chance to participate in this economy!  Why?  Well, the Global Financial Inclusion database of the World Bank shows that only 47% of people in low and/or mid-income countries use banks.

According to Deutsche Bank, the current money system is fragile. It is estimated that by 2030 digital currencies will rise to over 200 million users. This implies that digital currency could eventually replace cash one day, as demand for anonymity and a more decentralized means of payment grows.

The book “The Future of Money: How the Digital Revolution Is Transforming Currencies and Finance,” written by Eswar Prasad, indicates that Central banks will soon become the real driving force behind digital money.  How?  Well, new cryptocurrencies will continue to emerge and their popularity will continue to expand.  Such will push central banks to develop their forms which would likely be more stable.  According to Eswar Prasad, the end of physical cash is in sight.

Image source: the future of money

This position is based on the belief that the driving force won’t be phones or credit cards but central banks.  As noted earlier, the central banks will be driven by the emergence of more and more cryptocurrencies to develop their digital currencies, which, we said, would likely be more stable.  And as for cryptocurrencies themselves, capricious evolvement is imminent.  

This can be easily seen from conglomerates like Facebook and Amazon joining in.  With such huge conglomerates in the game, such evolutions will come with cumulative innovations.  Even the current innovations are already reforming finance and have even begun to modernize the way we invest, trade, insure, manage risks, etc.  

For central banks to succeed, governments will set up clear policies concerning digital currency. First, they will have to make the use of digital money throughout the economy a clear policy goal. Secondly, they will need to fast-track the development and flow of immediate clearing and settlement systems pan-economy.  Efforts of government in this direction, therefore, will need to take these directions:

  • Use neutral tech approaches that strictly ensure a seamless and interoperable system.
  • Meet the criteria of privacy and general access.
  • Fulfil economic criteria of plainness and trust.  

Cybersecurity and the Future of   Money

The increased use of digital currency shortly requires banks and financial institutions to pay close attention to cybersecurity. They will have to ensure that people's money is protected from cyber-attacks.

The government will be under serious scrutiny by the public as they demand a level of transparency, management, accountability, and fairness.

Conclusion

Make no mistakes, shortly, we will go cashless and use digital currencies instead. And with that an upsurge of banking frauds.  Financial institutions, therefore,  must find new ways to detect a scam and prevent it. The cryptocurrency is also a burgeoning frontier from which the banks will also need to suit up for the snowballing security threats.   Financial institutions must have all these in mind as they go into the future, and be armed with innovative fraud controls.