Sweden, the poster child for a cashless society, is supposedly going to be the first country to completely renounce the use of physical currency by March 2023. But in the case of a single successful widespread cyber-attack, the financial data of millions of citizens could be compromised. The advantage of holding assets in cash is that paper cannot be the target of ransomware.
Convenience is always going to be a key selling point, and people will always want to keep everything as simple as possible. The simplicity of personal finance and payments managed entirely via technology is very attractive.
However, the potential damage from an attack is much more significant. Back in 2007, the Nordea Bank fraud incident saw cyber-attackers steal the login credentials of users via malware. The perpetrators got away with $1.1m in a textbook e-banking attack. Other attacks have been much more significant, like the Equifax hack that resulted in roughly 143 million of its American customers having their information stolen.
Arguably the biggest risk with having money in a single account coded in binary is that it only takes one good attack to jeopardise it. Bank statements, transaction history, standing orders, and other sensitive data is at risk. Conversely, the damage from a stolen wallet is far less as cash is not generally carried around in large sums and credit cards can be cancelled on the spot.
There is also the question of archiving bank information. Keeping a low-tech version of accounts and transaction histories in the form of paper makes it a lot harder to erase or compromise the data at the push of a button.
No matter how advanced a defence system is against malware, social engineering and human error exploits will always be issues. All of these risks are not to show that a digital future will be less secure, but to prove that paper, cash, and low-tech solutions will still have a viable place – at least in security.
The question is not whether or not digital will replace cash, it’s when. However, the value of a tech-resistant security backup will endure. As the world is seemingly moving more and more towards digitising the economy, it cannot seem to escape an apparent paradox inherent to technological development: security is becoming more complex, but so are potential hacks. And sometimes, the best way to defend against a very advanced form of attack is with a very simple solution.