Banks take Insurance route to ease the impact of Cyber attacks
Published Date | 2018 September 14
Banks are demanding increase for Insurance to pacify the effects of growing cyber-attacks which will promulgate the cyber-security market in the long run.India: There has been an upsurge for insurance against online frauds as the numbers of cases are continuously growing and are likely to grow further since the laws regarding protection of personal data are in place now. There was a huge scenario regarding the cyber-attack on Cosmos Co-operative Bank and since then lenders are purchasing higher insurance covers. Most of the banks in the private sector are buying insurances worth USD 10-50 million to safeguard their money as well as information. This is rapidly increasing the market of cyber security and will a positive impact in the near future. As days are proceeding, the cyber-security cases are also rising in numbers. Around 3,000 online frauds in the banking sector took place last year. According to the estimation of the industry, in every ten minutes one cyber-attack takes place with Maharashtra and Uttar Pradesh reporting the highest cybercrimes. The companies in India are increasingly opting for insurances regarding cyber-crimes so that they receive aspects like forensic costs, cyber extortion costs and covers other first-party expenses. The numbers of policies have been growing cumulatively by almost 25% over the past four years and are expected to increase further by almost another 30% post enactment of the Personal Data Protection Bill which was released recently by the ministry of information technology in accordance with the European Union’s GDPR in 2018.The obligations that have been proposed in the bill by Justice BN SriKrishna will be leading to the data liability cover with various companies taking adequate cover for cyber risk and improving the ones which are already existing. According to BlueWeave Consulting Research, the market for the cyber security is significantly growing. There has been a noticeable increase in cybercrimes during the past few years and it is still rising. The government has come up with the Data Protection Bill in 2018 which according to BlueWeave is a right step towards bringing down the cybercrimes and attacks that are taking place. The bill has been released at the time when major events at the international level took place like the breach by a consultancy firm in Britain, the attacks on WannaCry and Petya and other thefts of banking data while the initiation of strong international privacy laws. While there is a natural course of time that will be needed for the bill to become an Act, what we can derive from the initiative is that it shows the powers the government has and the intention it holds to eradicate the cybercrime situations in India. Also it wants to put stiff obligations on the Indian entities and protect the privacy of India. The bill enactment is expected to have a major impact on the ecosystem of cyber security that already exists all across the country. Thus, it will eventually lead to growth of the cyber security market in the country and effect the global market as well.