Technology has evolved at breakneck speeds over the past decade, and with it, so have threats that financial services companies and their customers are exposed to.
The data security risks that cyber attacks introduce are unprecedented, not to mention the financial cost that these incur. Trustwave’s 2023 Financial Services Sector Threat Landscape Report found that close to $6m is lost with every breach that financial institutions suffer.
As banks persistently allocate resources to modernise their operations, they integrate a plethora of systems into their IT networks, which are no doubt a necessary part and parcel of technological innovation. These systems fulfil diverse functions, such as enabling remote work, enriching customer experiences, and propelling value generation.
At the same time, they expose potential vulnerabilities that malicious entities might latch on to. This means that banks and financial services firms require a reinforced security strategy.
This kind of strategy would encompass the length and breadth of identification of weak points in the digital banking infrastructure, thorough risk and operational assessments, and increased agility of responses, for developing best practices and future resilience planning.
Operational awareness and defensive measures
A comprehensive assessment of operational vulnerabilities from technology risks tied to automation and Artificial Intelligence, to data leaks, can help identify potential weaknesses in the digital infrastructure.
It’s crucial, as an initial step, to prioritise frequent risk assessments. Data encryption shouldn’t be underestimated here as access controls protect sensitive information and implementing multi-layered security protocols from robust firewalls to antivirus software can help guard against avoidable risks.
The role of technology and data governance
Data protection and compliance with regulations like GDPR in Europe, combined with managing access to sensitive data and leveraging cyber security solutions, can help banks remain a step ahead of threats.
In the swiftly changing world of digital banking, secure and user-friendly authentication methods take on paramount significance. Conventional techniques like passwords and PINs fall short in safeguarding critical financial information in the face of cyber threats. Transitioning to passwordless, phishing-resistant solutions is paramount to enabling safe and secure online experiences.
Biometric authentication aside, AI and ML’s potential in threat detection and awareness can enhance data security and trust in financial institutions. AI can bolster cyber security measures, and proactively identify suspicious traffic, network connections, distinguish phishing attempts, and other clandestine activities by processing threat intelligence faster than with human intervention.
It can also be used to automate incident handling where agility can minimise damage and aid recovery for the institution. From detection to response and analysis, AI powered tools can make data classification, access management, and data protection more robust.
Planning for resilience
Hackers and cyber attackers are constantly staying ahead of changes in technology and adapting to outpace defence mechanisms put in place by financial institutions. The plethora of sensitive customer data is thus constantly at risk and fending it off requires intuitions to stay ahead of evolving threats and cyber criminal tactics.
Operational awareness and leveraging new technologies for threat detection and response is only one side of the coin. Agility and training are supplemental to these for resilience planning. Proactively staying ahead of evolving threats and cyber criminal tactics by continuous monitoring and threat intelligence sharing can help foresee and prevent breaches.
Since prevention is better than cure, training employees on best security practices shouldn’t be ignored and it’s important that institutions cultivate a culture of cyber security awareness with exercises and training.
Planning for resilience also involves staging a robust incident response plan to ensure the quickest response and turnaround possible in the face of a security breach or cyber attack. A contingency cyber incident response team is a great way to do this, where backups to recovery strategies are available as necessary to minimise downtime.
The financial services industry is often targeted due to the volume and value of sensitive customer data it houses, and its vulnerability is exacerbated as it rides the wave of technological innovation. The integration of numerous systems into IT networks brings efficiency but also heightened exposure. This calls for enhanced vigilance and the adoption of comprehensive cyber security measures to safeguard financial data.
The digital transformation of the financial landscape demands a re-evaluation of traditional security practices. Passwords and PINs, once deemed sufficient, are now susceptible to the relentless advances of cyber threats, where the steps forward are multi-fold, combining digital innovation to strengthen defence with agile solutions powered by education and best practices.
As the financial world continues to evolve, it is imperative for institutions to stay ahead of cyber criminals by fortifying their digital infrastructure, leveraging cutting-edge technologies, and embracing robust authentication methods. In doing so, they not only protect their own interests but also the financial well-being of their customers.
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