CYBERSECURITY CHALLENGES IN DIGITAL BANKING SYSTEMS

ABSTRACT Digital banking has transformed financial services by providing 24/7 access, faster payments, and seamless customer experiences, but it also exposes banks and customers to an evolving set of cyber threats. This paper investigates major cybersecurity challenges in digital banking systems, analyzes typical vulnerabilities across architecture layers, reviews prior research and regulatory guidance, and proposes practical mitigation strategies. Using a mixed-method approach — literature review, survey of banking users, and technical incident analysis — the study identifies the most prevalent attack vectors (phishing, account takeover, API abuse, insider threats, and distributed denial-of-service), the human and process weaknesses that amplify risk, and gaps in current controls and compliance practices. The paper concludes with prioritized recommendations for banks, including stronger identity and access management, secure development lifecycle adoption, vendor risk management, and enhanced incident response capabilities. Limitations and avenues for future research are discussed. Keywords: digital banking, cybersecurity, vulnerabilities, threat landscape, identity and access management (IAM), incident response