Analytical hierarchy processes and Pareto analysis for mitigating cybercrime in the financial sector
| DOI | https://doi.org/10.1108/JFC-04-2021-0086 |
| Published date | 19 July 2021 |
| Date | 19 July 2021 |
| Pages | 984-1008 |
| Subject Matter | Accounting & finance,Financial risk/company failure,Financial crime |
| Author | Oluwatoyin Esther Akinbowale,Heinz Eckart Klingelhöfer,Mulatu Fekadu Zerihun |
Analytical hierarchy processes
and Pareto analysis for mitigating
cybercrime in the financial sector
Oluwatoyin Esther Akinbowale,Heinz Eckart Klingelhöfer and
Mulatu Fekadu Zerihun
Faculty of Economics and Finance, Tshwane University of Technology,
Pretoria, South Africa
Abstract
Purpose –The purpose of this study is to use a decision supportmodel based on the Analytical Hierarchy
Process (AHP) and Pareto analysis (PA) for ranking the impact of different kinds of cybercrime in
organisationsin the financial sector to support decisions on cybercrimemitigation.
Design/methodology/approach –From a structured questionnaireto the staff of 17 licensed banks in
South Africa in charge of management,administration and operations, the perceived effectof cybercrime on
the organisation’s goals, namely, organisation’sprofitability, goodwill, customers’satisfaction and risk
management was derived. The pairwise comparison of the organisation’s goals and identified forms of
cybercrimewas done using the AHP.
Findings –The results obtainedindicate that there was a consensus (100% ofthe answers) that the effect of
cybercrime has negatively impacted the organisation’s objectives profitability and goodwill. Also, still
95.23% of the respondents agreed that the effect of cybercrime has negatively impacted the level of
customers’satisfaction, whileonly 7.15% saw an impact on the organisation’s risk management processes.
Using theseresults in the AHP, analysis delivers a hierarchical orderabout the relevance of prevalent forms of
cybercrimefor the organisation¨s cybercrime mitigation. The PA furthershows the magnitude of the forms of
cybercrimerelative to each other.
Practical implications –Hence, this study provides a decision support framework for organisational
management in thequest to explore the impact of cyber fraud. It can serve as a practicalguided approach for
the applicationof AHP analysis for the existing and emerging formsof cybercrime.
Originality/value –The novelty of this study lies in the fact that the combinationof the AHP and PA to
support solving a multi-criteria decision problem relating to the prevalence of cybercrime has not been
sufficientlyhighlighted by the existing literature.
Keywords Pareto analysis, Analytical hierarchy process, Cybercrime, Decision model,
Multi critical decision
Paper type Research paper
1. Introduction
The cases of cyberattacks on the emergingeconomies are rising rapidly (Kshetri, 2019). The
recent advances in information technology (IT) have been identified as one of the prime
drivers of the financial sector which has continued to transform the sector (Ali et al.,2017).
This has assisted the financial sector to extend its services, and to gain some competitive
edge with significant improvementin customers’satisfaction. For instance, the introduction
of the e-banking platform has made transactions much easier and simpler compared to the
traditional banking system. With e-banking, transactions and other related financial
activities are carried out using IT devices instead of human resources in the traditional
banking system. The e-banking services permit transactions without any physical
JFC
29,3
984
Journalof Financial Crime
Vol.29 No. 3, 2022
pp. 984-1008
© Emerald Publishing Limited
1359-0790
DOI 10.1108/JFC-04-2021-0086
The current issue and full text archive of this journal is available on Emerald Insight at:
https://www.emerald.com/insight/1359-0790.htm
interaction between the bank and the customers as customers can easily access the bank’s
information and services via different internet platforms (Agrawal, 2016). However, the
same avenue which serves as the agent of transformation is still being exploited for the
perpetration of cybercrimes.This has a far reaching effect on the integrity and reputation of
financial institutionsby undermining public confidence.
Cyberspace is characterised by sharp and unethical practices with cybercrime on the
increase over the years (Uma and Padmavathi, 2013). The exploitation of cyberspace for
cybercrime such as securing information without authorisation, malware attacks, IP theft,
fiscal fraud, extortion, online fraud, spying, disabling of networks, fake links,
impersonation, data and cash theft are consequentialto the customer, financial institutions
and the economy at large (Detica Limited, 2011). In South Africa, 13,438 cybercrime
incidences were reported in 2017 which reportedly cost the banking industry more than
R 250m in gross losses and the cybercrime incidences grew by 20% from 2018 with an
increase in the gross losses by 8% (South African Banking Risk Information Centre, 2018).
In 2015, it was reported that there were a total numberof 602 million cybercrime victims on
a global scale with South Africa havingan approximate 8.8 million of such cases (Symantec
Report, 2016). There are similar reports on the cost of cybercrime occurrences globally
(Centre for Strategic and International Studies, 2014;Serianu, 2016;Symantec Report,2016;
South African Banking Risk Information Centre, 2018). Cybercrime has constituted an
increasing global threat, the resultant effects on the economy, financial instructions and
society can no longer be downplayed (UK Finance, 2020). Therefore,the motivation for this
study is the quest to reduce the occurrences of cybercrime by tackling cybercrimefrom the
primary source rather than focusing on measures to minimise the impact after such
occurrences. The proactive measures of tackling cybercrime have been identified as
sustainable in the fight against cybercrime (Ali et al.,2017;UK Finance, 2018;Malik and
Islam, 2019). The determination of the impact of prevalent forms of cybercrime in the
financial sector calls for a decision support model which allows dealing with multi-criteria
decisions.
The objective of this study is to use the Analytical Hierarchy Process (AHP) and Pareto
analysis (PA) as tools for ranking and visualising the impact of different kinds of
cybercrime on the overall goal in organisations in the financial sector via different (multi)
decision criteria. Based on survey data, at first, relative weights were allocated to different
forms of cybercrime based on theirpairwise comparison with respect to their importance on
fulfilling the organisationaltargets, before the overall weight is calculated using the AHP. In
addition, the Pareto distribution diagram is used to show the magnitude of the possible
impact of each of the cybercrime forms relative to the organisation¨scybercrime mitigating
goals. Hence, this paper provides a decision support framework to assess the impact of
different forms of cybercrime on the target system to tackle and mitigate the identified
forms of cyber fraud in a sustainable way.
The rest of the paper is organised as follows: Section 2 presents the literature review,
Section 3 presents the implementation of the AHP and Pareto distribution diagram and
further discussions on the results obtained from an example were presented in Section 4
while Section 5 concludes the study with the summary of the findings and appropriate
recommendations.
2. Literature review
Cybercrimes have been defined as fraudulent activities carried out with the use of
computers, the internet and other IT devices, hence the crime is digital in nature (Okeshola
and Adeta, 2013). Omodunbi et al. (2016) identified the forms of cybercrimes as fraudulent
Pareto
analysis for
mitigating
cybercrime
985
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