Banks rush to buy cyber security cover as digital payments rise

At a time when cyber threats are on the rise for banks for increasing cashless transactions and effects of demonetization, insurers see rise in demand for cyber insurance and cyber liability insurance, in particular. There are various cyber insurance covers available in the country, but it is the cyber liability insurance which is in maximum demand for the banks, say insurers. Non-life insurers that provide cyber insurance cover include New India, National, ICICI Lombard, Tata AIG, HDFC Ergo and Bajaj Allianz.

Country’s largest lender State Bank of India (SBI), which fell victim to cyber frauds some time back, is now considering insurance to protect its 30 crore customers. “We have always seen maximum security in all our IT systems. We are now considering to avail cyber insurance covers for our customers,” SBI managing director Rajnish Kumar said. “We are actively examining the issue. The only thing that we have to ensure is that insurance costs fit into our scheme,” he added.

Recently, in one of the biggest ever breaches of financial data in the country, customers of 3.2 million debit cards belonging to different banks were hit by cyber frauds where their ATM details were compromised. Several victims even had reported unauthorised usage from locations in China. We are here to ensure protection of our customers and hence we will definitely go for cyber insurance cover as and when it was required for the bank,” Bank of Baroda MD & CEO, PS Jayakumar said. Insurers said they do see uptick in demand for cyber insurance covers by banks. “We are in talks with quite a few banks to provide cyber insurance cover to them,” New India chairman and managing director, G Srinivasan said without divulging any details. “Cyber threat is on the rise in recent times for the banks and hence they must go for cyber insurance cover,” he added.