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How to boost financial institutions' 'immune system' against security breaches

Anshuman Singh, Director, Product Management of Application Security, Barracuda Networks | Nov. 11, 2015
It is essential for financial institutions to assess their vulnerability to cyber-attacks and to deploy robust risk management sentinels that have the capability to track, manage and mitigate these risks.

This vendor-written piece has been edited by Executive Networks Media to eliminate product promotion, but readers should note it will likely favour the submitter's approach.

In today's ever-changing world, rapid advancements in technology have changed the dynamics of modern business. Financial institutions (FIs) and their supporting networks have subsequently grown in scope and complexity.

According to a 2014 McKinsey Asia Personal Financial Services Survey, the number of digital banking customers in ASEAN (Association of Southeast Asian Nations) countries is expected to grow to 150 million by 2020. In the greater Asia Pacific region, this number is expected to grow to 1.7 billion. The survey also reported that the digital banking penetration rate in Singapore, India, Indonesia and Philippines is 94 percent, 18 percent, 36 percent and 13 percent respectively. These figures are indicative of an increasingly mobile group of banking customers.

Changing dynamics of the financial sector
Mobile phones are becoming the main medium for performing banking transactions in many Asia Pacific markets. Providing banking services that are available at one's fingertip is a revolutionary concept that has become a popular option for many, partly due to its convenience, speed and mobility. According to IDC, worldwide mobile payments will account for US$1 trillion in value in 2017, up 124 percent from the less than US$500 billion expected in 2015.

Therefore, it is now crucial for FIs to have a dominant presence online to meet the demands of these customers. Consequently, more FIs are deploying online systems that include Internet banking, mobile banking and payments, online trading platforms and insurance portals to reach their customers. FIs manage trillions of dollars in transactions a day, and many of their customers expect transactions to be performed efficiently and quickly. Accordingly, customers regard their financial information as highly sensitive and personal data and would expect them to be managed in a secured manner. A failure to gain customers' trust in this aspect would cause FIs to lose out in serving the needs of the mobile banking customers.

Over the last 10 years, cyber-threats have become more complex and diverse. Cyber-threats are multiplying rapidly and morphing into powerful munitions that can inflict significant damage on FIs. In order for FIs to operate well in the web 2.0 era, it is essential for FI tech managers to assess their vulnerability to cyber-attack and deploy robust risk management sentinels that have the capability to track, manage and mitigate these risks.

As much as the open network is able to facilitate faster and has more flexible operations, it is a fertile ground for cybercrime. While there is tremendous potential for mobile platforms that offers financial services, the distinctive risks associated with mobile banking may impede progress and uptake. Therefore, it is very critical that the new security risks presented by mobile banking are identified and mitigated.

 

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