Initiating transactions by using any of above applications and payment gateways, the data

travels from a defined route to bank’s system over the internet for the verification and
validation of payment request and response back by accepting or declining the request to
the transaction medium. In case of accepting the request, there would be a financial
movement from one account to another account. Since the data travels around the intranet
and/or internet, which may be accessible publicly, there could be a chance of tampering
or theft of the data by unauthorized anonymous persons who can diversify the transaction
data for their own benefit. So, the data traveled across the network must be secured and
protected to mitigate the risk of frauds.

1.2 Objective of Study

Following are the key objectives of the study:
 To identify the major security threats to financial institutions
 To identify current security practices and process adopted by commercial banks in
Nepal
 To provide actionable recommendations to use state of art technological solutions
and IT governance best practices

1.3 Rationale of Study

Before adopting the Information Technology in the banks or in any other organizations,
administrative personnel of the organization was responsible to safeguarding paper based
records which were used to keep in file cabinets and rooms. The file cabinets and the
rooms kept locked and only administrator could hold the keys. Over the time, information
technology is being adopted to grow the business in an effective and efficient way by all
the organizations. Sharing and storing information through networks and computers has
proven a cost effective way of getting things done. In today’s world, information is a
power. In banks, it is the power to make entire banking process more effective and
efficient. Information about customers, staffs, assets, inventories, banking services are
collected and maintained so that bank can effectively coordinate and focus on the
services offered to the customers.