Electronic financial transactions over the Internet Essay

Electronic financial transactions over the Internet - Essay Example Technological innovation in terms of developing security software aided this process and so did the process of globalization. As a culmination of these parallel but complementary processes, e-commerce in general and electronic financial transactions in particular has firmly taken root in mainstream global economy. While this kind of progress in such a short span of time is an impressive achievement, there is much work to be done in terms of creating robust security systems for the Internet. This essay will look into the various types of security threats facing electronic financial transactions, the potential damage they could inflict, the remedial measures to counter these threats and the effectiveness of such measures. The architecture of the Internet is such that it is inherently difficult to ensure security. Alongside this, the concept of user anonymity makes the Internet â€Å"an attractive medium for extortion and crimes involving theft of personal information for illicit financial gain† (Misra Scherer et al, 2004). As per a report released by IDG News Service, many organized crime groups avail of the services offered by hackers to implement complex and sophisticated financial schemes to swindle money from unsuspecting participants. According to the Internet Crime Complaint Center, as much as $200 million was lost in the year 2006 alone. And each year this sum seems to increase, since financial institutions like banks and insurance companies are lucrative targets for cybercriminals. A FBI report released at the beginning of the new millennia has confirmed the nexus between computer hackers and organized crime groups. Many of these organized crime groups are said to operate from Eastern European countries that were part of the erstwhile Soviet Union. In such cases, the hackers first crack the security systems in place and gain access to vital data. The organized