The digital age is bringing about massive changes in the financial services space. As financial institutions strive to increase flexibility, speed and efficiency, the dynamics of the industry are shifting towards digitization at neck-breaking speed.
And while the benefits are immense, cyberspace has created vulnerabilities, leaving financial enterprises open to the threat of evermore sophisticated cyberattacks and security breaches.
Trust and reputation are fundamental to financial services. Customers want to know their investments are safe. To remain competitive, financial institutions need to meet the demands of the modern customer, while ensuring security is a top priority.
Cyberattacks reached an all-time peak in 2016, and industry experts predict that they’ll continue to increase throughout 2017, so companies need to be equipped with the right defenses.
Here are just some of the digital security trends affecting financial services:
A Move to the Public Cloud
More companies are migrating away from private clouds as it’s now believed public clouds offer a higher level of security. They often have larger, more skilled security teams who can apply their expertise to all layers of the application and operating systems.
Increased Ransomware, Spear Phishing and DDoS
As more IoT (the internet of things) devices are used, ransomware is becoming a bigger problem. Security watchdog CSO warns that as more employees access corporate networks from their personal devices, malware infections, targeted in-house spear phishing and DDoS attacks are on the rise.
The Rise of FinTech
The recent emergence of FinTech as a major competitor in the finance space has shook the industry to its core. And it brings with it, new technologies that are changing the way business is done.
A PriceWaterhouse Cooper report names Blockchain, advanced analytics and artificial intelligence as the stars of 2017. But they are moving so fast, it’s hard to keep up. The need for specialist data engineers with predictive analytics skills is greater than ever, and demand is outweighing supply.
New technology offers new opportunities. But it also increases the need for higher security. And as industry reports suggest FinTech companies are targeted 300% more than any other sector, it’s an issue that can’t be ignored.
So, what advancements have been made to increase security and arm financial services against threats?
One of the biggest investments for financial services in 2017, is Blockchain: a de-centralized ledger of every single transaction, shared in real-time across a peer-to-peer network.
Blockchain-based technologies are tamper proof and all parties must acknowledge and verify a transaction before it can be confirmed valid.
Goodbye, passwords and PINs, hello ‘selfies’. The biometric age is here.
MasterCard is already using fingerprint embedded technology in debit and credit cards to make payments easier and more secure. The company is also testing a facial recognition app with the help of smartphone technology; insisting, people should be identified for ‘who they are, not what they remember.’
Distributed Denial of Service attacks: overwhelming a system with traffic to the point where it breaks down, are an on-going paint point in the finance sector.
As attacks continue to grow in frequency and complexity, companies are using multi-layered defense solutions using a cloud-based protection service. This is combined with a network perimeter defense that can predict attacks and therefore stop them happening in the first place.
Open Source Software
It may seem less secure, but more and more companies are seeing the benefits of an open code that can be modified by any user. Open sourced software is developed in a collaborative environment, by a larger number of experts, so problems can be fixed as they arise, allowing users to judge more efficiently how secure a program is.
Security codes are built into the program at the beginning stages and throughout development, so the approach to threats is pro-active rather than re-active.
Cybersecurity issues and customer expectations are changing the landscape of the financial services space. FinTech is not just the future, it’s the here and now, and financial institutions that don’t embrace it as a business model, will be left behind.
Are you prepared for the changes?