Electronic Banking Risks: Challenges, Security Concerns, and Mitigation Strategies

Sara Bixhaku (), Antoneta Polo (), Ilirjana Zyberi () and Enkela Caca ()
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Sara Bixhaku: "Eqrem Çabej" University, Gjirokastra, Albania
Antoneta Polo: "Eqrem Çabej" University, Gjirokastra, Albania
Ilirjana Zyberi: "Eqrem Çabej" University, Gjirokastra, Albania
Enkela Caca: "Eqrem Çabej" University, Gjirokastra, Albania

Sustainable Regional Development Scientific Journal, 2025, vol. II, issue 1, 44-53

Abstract: Electronic banking has transformed the financial industry by offering convenient, fast, and cost-effective services to consumers and businesses. However, the digitalization of financial transactions also introduces a range of risks and security concerns. Key challenges include phishing attacks, identity theft, malware, and system vulnerabilities, which can lead to financial loss and erosion of customer trust. Additionally, the rapid evolution of technology and increasing regulatory demands pose significant operational hurdles for banks. This paper explores the major risks associated with electronic banking, highlights the most pressing cybersecurity threats, and examines both technical and administrative strategies to mitigate them. Rapid technological development makes the Internet the best way to provide customers with banking services regardless of time and geographic boundaries. Compared to traditional banking, electronic banking provides ease, convenience, and access to their customers so that they can use the banking site for all types of transactions in a secure environment. Despite the many benefits offered by this service, it remains a double-edged sword and is not used by every customer, because the growing distance between the bank and customers can lead to a lack of trust and increased concerns for safety. A particular risk comes with trying to integrate new channels with existing channels. An important step that banks must take before undertaking any kind of transformation is to ensure that online banking risk is properly addressed. Addressing e-banking risk includes a number of measures that banks and users can take to minimize and manage these risks. These include multi-factor authentication, data encryption, customer awareness programs, and robust regulatory compliance. Addressing these challenges requires a holistic approach that combines technology, policy, and stakeholder collaboration. By strengthening digital security infrastructures and fostering a culture of cyber awareness, financial institutions can better protect their systems and customers in an increasingly digital financial ecosystem.

JEL-codes: D14 G21 (search for similar items in EconPapers)
Date: 2025
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