PHILIPPINE financial institutions should consider leveraging artificial intelligence (AI)-powered tools to ramp up their cyber resilience as threats targeting online payments are on the rise, enterprise IT management software provider ManageEngine said.
“I think the first thing that comes to mind is deploy AI at the defense because your attackers are not coming to you with your traditional deterministic rules,” Ramprakash Ramamoorthy, ManageEngine Director of Research Ramprakash Ramamoorthy said in an online interview with BusinessWorld.
This can help institutions protect themselves against cyberattacks that are now becoming more sophisticated due to AI, Mr. Ramamoorthy said.
“Advanced machine learning techniques and artificial intelligence techniques can look at the behavior of the user and prompt if there is an anomaly. So broadly, AI-based thresholding, AI-based setting of rules can go a long way. These are very simple steps to involve AI into your fintech (financial technology) workflows.”
He said the digitization infrastructure in Philippines is “booming,” with fintechs leading the race. This has led to an increase in online transactions, which are common targets of cyberthreats.
Digital payments made up 52.8% of the volume of retail transactions in 2023, higher than the 42.1% share in 2022, according to the latest Bangko Sentral ng Pilipinas (BSP) data.
In terms of value, 55.3% of retail transactions in 2023 were done online, higher than the 40.1% the year prior.
The BSP said the increase in digital payments was driven by wider use of online transaction channels among people and businesses, with the coronavirus pandemic accelerating the shift.
Meanwhile, Philippine banks lost P5.82 billion due to cyberattacks in 2024, 2.6% higher than the previous year, the central bank earlier said, adding that phishing, “card-not-present” fraud, account takeover or identity fraud, and hacking are the top cybersecurity risks faced by financial institutions.
“The financial services industry is constantly under the threat of cybercrime. You just assume yourself that you are being attacked all the time. In the Philippines, more than 50% of all retail payments have been done digitally. Merchant payments, peer-to-peer transfers and business-to-business payments are also being top contributors. So, that means the volume of transactions has been growing,” Mr. Ramamoorthy said.
“The central bank is also proactively enhancing cybersecurity frameworks, looking at the need for financial institutions to adopt robust cyber-resilient measures to protect consumers and maintain trust in the digital financial system… Given how emerging economies like the Philippines are having more and more people using digital tools to do their finance, the cybersecurity part becomes super important, especially things like educating your end users.”
He noted the prevalence of attacks using text messages with links that aim to steal users’ banking credentials.
“Given that there are a lot of newer users that are doing their first online transactions, their first digital payment, their first peer-to-peer payments, it is easy to lure them into it… Whatever the banks are doing right now is good, but there is still a lot of room for improvement.”
Deepfakes and phishing e-mails are also a concern for financial institutions, as the rise of AI has also allowed cyberattackers to improve the quality of the tools they use to steal data, Mr. Ramamoorthy said.
“Your digital safety in terms of finance starts from your digital safety in your personal life. How much data are you sharing with who? Having software that is subsidized by ads means you’re selling your personal information — and that means you could easily be defrauded and you could easily be a victim of a cyberattack, especially when you’re doing payments. Because finance is more important, right? An attacker [wants] to steal your money. So, whatever you do, exercise the right privacy controls,” he said.
“Despite what governments can do, despite what fintech institutions can do, it boils down to the individual level. Understanding privacy, understanding security, this whole digital learning, this whole digital understanding of how these technologies work, has become super important in this day in which attackers are heavily using AI to impersonate people, to create fake links, to divert funds that you’re sending to another person. There’s a lot of AI in the attacking end, so we have to be all the more careful.”
Mr. Ramamoorthy added that the government should also help enable the distribution of cybersecurity technology across banks to ensure that the entire sector becomes resilient against evolving cyberthreats.
At the organization level, banks should address the lack of employee cybersecurity awareness, implement cybersecurity training programs to educate employees about potential threats and safe practices, and encourage a culture of security awareness and vigilance across all levels, he said.
“Because bankers know banking, but technology could be a different ballgame. The richer banks could afford a lot of technology, but it’s the bankers that are lagging behind,” he said. “The second thing is identity and access management weakness… And also, tightening your endpoints. Digital adoption has technically expanded the attack surface with endpoints often lacking adequate protection, making them susceptible to ransomware and other attacks. So, it’s important to deploy endpoint security solutions that include antivirus firewall, intrusion detection systems, and so on.”
“Also, regularly patching these systems is going to be important. And finally, set up guidelines on incident response planning. Organizations often lack a well-defined incident response plan, leading to delayed reactions and increased damage during cyber incidents,” Mr. Ramamoorthy added. — A.R.A. Inosante
