[marcuspek]

I was pondering for while on this topic. I used to be thinking that online banking or digital banking is only an extension of the physical banks. In case of cyber threat, we can still revert to the old brick and mortar bank branches to continue the services. However for a digital only bank, that is no longer the case. I can’t think of any foolproof method that a bank with its liability and obligation to the public can be safe without a physical presence.

Any thought?

Topic

[Ganesh.Sundararajan]

Good topic. Banking by nature in the current state, can never be 100% online. Though, the services can be offered online, which is very common in the current days, for a bank to exist as an online entity, is too far. Cyber threats make this a distant possibility.
Threats associated with onboarding the client is the biggest risk that the bank could encounter if it were to go purely on a online presence.

[dunkyduncs]

I agree, good topic! There are actually banks that are doing client onboarding with the KYC (Know Your Client) checks being done through mobile phones. It involves the user taking a series of selfies as directed by the application and combining it with artificial intelligence to work out the accuracy of the photos to ensure that the photos have not been doctored. Its actually been passed by the regulators here in South Africa.

As for banks being 100% online, i think we are a way off from there.Besides the physical limitations of needing ATMs, physical cards and means to deposit the initial cash etc. The mindset of the client base and the “people change” aspect is one of the biggest hurdles they would need to face. I think the cyber threat for banks is always going to be there, and will always be escalating as the digital march continues. The challenges i think are all related around the actual end points that consumers touch more so than the risk of cyber.

[Jaydeeayodeji]

Good one! I believe it is possible to have a bank that would run 100% online without physical buildings. In this age of cloud computing , Crypto currencies as well as online identity verification services. I believe this could be possible in years to come.

[Dzaako]

Is your proposal for extreme form of Branch-less banking where there is no physical presence at all? There may be some advantages here for places in the world where financial inclusion is a challenge due to the high overhead cost of providing a physical branch to remote and inaccessible locations. Mobile banking provides a low-tech alternative to a traditional online presence. There are risks inherent to either approach regardless.

What happens to your online-only bank when you are hacked? Say a DDoS attack takes down your website and all associated web services?

[Author]

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