Se­cu­rity of on­line fi­nanc­ing a State con­cern

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China Daily (Canada) - - TORONTO -

One of the big­gest changes to the do­mes­tic financial industry dur­ing the 12th Five-Year Plan (2011-15) has been the boom in on­line financial ser­vices. With the smooth de­vel­op­ment of In­ter­net-based tech­nolo­gies, e-pay­ments and e-trans­fers have fun­da­men­tally changed the way peo­ple use money. For in­stance, it is in­creas­ingly com­mon for peo­ple to pur­chase a prod­uct on­line us­ing their cell­phones and then await its ex­press de­liv­ery.

In or­der to com­pete with the In­ter­net com­pa­nies that pro­vide con­ve­nient dig­i­tal ser­vices and prod­ucts, banks have had to con­stantly ex­pand their own on­line ser­vices. Be­sides e-pay­ments and e-trans­fers, peo­ple can now or­der on­line travel checks, buy in­sur­ance on­line, and pur­chase stocks and bonds via the In­ter­net.

But while they add con­ve­nience to daily life, th­ese mea­sures also bring new risks. It is not dif­fi­cult to hide one’s true iden­tity in the vir­tual world and many evil­do­ers find the growth in on­line financial ser­vices con­ve­nient too, for the wrong rea­sons. They use the In­ter­net to com­mit frauds, hack bank­ing in­for­ma­tion, or even steal money di­rectly from pri­vate and pub­lic ac­counts. Be­cause of this, se­cu­rity should be a pri­mary con­cern for providers of on­line financial prod­ucts and ser­vices. For the State, there is ad­di­tional risk be­cause all the key tech­nolo­gies such as the pro­ces­sor chips, op­er­at­ing sys­tems, and data­bases are con­trolled by for­eign coun­tries.

The se­cu­rity of on­line fi­nanc­ing is con­cerned with the eco­nomic se­cu­rity of the State as well as the in­tegrity of in­di­vid­u­als, com­pa­nies and other en­ti­ties. In the 13th Five-Year Plan (2016-20) pe­riod, it is pre­dictable that the In­ter­net will bring more fun­da­men­tal changes to China’s financial mar­ket struc­ture, which will fur­ther high­light the sig­nif­i­cance of on­line-fi­nanc­ing ser­vices’ se­cu­rity.

It is more than nec­es­sary to pro­mote China’s abil­ity to de­fend financial se­cu­rity dur­ing the 13th Five-Year Plan (2016-20) pe­riod. For that, sev­eral prepara­tory jobs need to be done from now on.

For a start, China’s financial leg­is­la­tion lags be­hind and lacks de­tailed reg­u­la­tions cov­er­ing the providers and users of on­line financial prod­ucts and ser­vices.

Sec­ond, more at­ten­tion needs to be paid to on­line financial se­cu­rity. The State might need pro­fes­sional or­ga­ni­za­tions to co­or­di­nate ef­forts, like shar­ing risk in­for­ma­tion, to solve the prob­lem. Banks need to train their staff mem­bers in key po­si­tions, so that they are aware of the im­por­tance of se­cu­rity. And pur­chasers of on­line financial prod­ucts and ser­vices need to be aware of se­cu­rity as users.

Third, on­line financial se­cu­rity is part of the cy­ber­se­cu­rity, so it is ur­gent to strengthen the lat­ter as a whole to bet­ter pro­tect the former. In­sti­tu­tions and uni­ver­si­ties ought to strengthen re­search on key tech­nolo­gies

The author is a se­nior writer with China Daily. xinzhim­ing@chi­nadaily.com.cn such as fire­walls and en­cryp­tion, so as to fill in the cur­rent flaws in se­cu­rity. More im­por­tantly, tech­nolo­gies like iden­ti­fy­ing vis­i­tors and track­ing them back to the source must be de­vel­oped so that evil­do­ers will no longer be able to hide them­selves in the vir­tual world.

Fourth, do­mes­tic tech­nol­ogy needs to be de­vel­oped. Cur­rently over 70 per­cent of the routers of do­mes­tic financial in­sti­tu­tions are Cisco prod­ucts, while over 80 per­cent of their servers are made by IBM; if that’s not enough, more than 70 per­cent of China’s four ma­jor Sta­te­owned banks and com­mer­cial banks use over­seas prod­ucts in their data cen­ters. All th­ese pose se­ri­ous chal­lenges to China’s on­line financial se­cu­rity and we need to both set stan­dards for im­ported prod­ucts to en­sure their se­cu­rity and en­cour­age do­mes­tic en­ter­prises to pro­duce com­pet­i­tive prod­ucts.

Fi­nally, but no less im­por­tant, on­line financial se­cu­rity is a global is­sue, too, which re­quires in­ter­na­tional co­or­di­na­tion. It is ad­vis­able for China to ne­go­ti­ate with other re­spon­si­ble pow­ers to es­tab­lish an ef­fec­tive mech­a­nism so they can share in­for­ma­tion on financial threats in cy­berspace and join hands to fight those threats. Only with the ef­forts of all can China ef­fec­tively en­sure its own on­line financial se­cu­rity.

The author is a se­nior re­searcher on cy­ber­se­cu­rity at CCID Think Tank, which is af­fil­i­ated to the Min­istry of Industry and In­for­ma­tion Tech­nol­ogy.

WANG XIAOY­ING / CHINA DAILY

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