New technologies have created new security risks, but the challenges for IT are not restricted to security alone.
The financial industry has experienced a variety of challenges over the past several years. Many of which revolve around operating in a new economic context after the financial crisis, restoring public confidence in the industry, and competing with new, aggressive, non-traditional innovators.
With the rise of Fintech in a digitized world, financial institutions are racing to embrace new-age technologies and delight customers with enhanced mobile and digital experiences. However, keeping up with the technology innovations presents a challenge in itself. Cyber insecurity, cost reduction, regulatory mandates, as well as next-gen platform and process changes resulting from new technology, are just a few. Several of these challenges have fallen upon IT to resolve.
Here are five of the top IT challenges financial institutions are facing today:
- Reducing security breaches and cyber theft, while increasing the business value of customer relationships
- Achieving compliance to regulatory mandates
- Transforming business to open doors for mobile and digital financial experiences
- Leveraging technology to ensure a competitive advantage
- Using technology to improve overall network performance
Unfortunately, new technologies have also created new security risks. Specifically, security breaches and ransomware that are becoming more organized than ever, are causing new and varied thefts of personally identifiable information (PII), financial, behavioral and historical data. As an example, the incredible $81 million fraudulent transfer from Bangladesh Bank, or the recent cyber theft from Tesco Bank, illustrate that traditional approaches to security are not sufficient or even worse companies are not taking the threat seriously. Kaspersky labs reported that financial phishing attacks were at an all-time high in 2016, with financial attacks accounting for nearly half (47.48 percent) of the 155 million phishing scams recorded.
But, the challenges for IT are not restricted to security alone. Financial institutions must deal with regulatory issues, such as the Dodd-Frank Wall Street Reform and Consumer Protection Act that are designed to create greater transparency and stability in the global banking system. In addition, in the new economic, digitized, and transformational environment, some of the dynamic technological shifts require financial institutions to quickly adapt to new and next-generation platforms, mobile banking and robust cyber security. Outdated core IT systems are a significant concern for global bankers. These typically translate into poor network integrations and the creation of blind spots as disparate corporate data networks attempting to communicate with each other transmit data incorrectly.
Blind spots are areas in which IT does not have complete visibility into what is happening on the network or how applications are behaving. Failure to invest in secure, agile systems that enhance digital and mobile banking can result in significant loss while compounding the risk for cyber-attacks. The problem is that the consumer is always a step ahead, impatiently seeking mobile and digital convenience applications. So, financial institutions and banks waiting to upgrade their systems face serious competition from a host of disruptive innovators able to provide customers with seamless and affordable experiences across a variety of channels.
Success for these institutions is highly dependent on how they leverage technology innovations, especially consumerization. Customers are now exploring mobile ready banking and financial apps that help them securely perform online transactions on the go. Online banking and trade is rapidly becoming more convenient via bring your own device (BYOD) as opposed to physically walking into a bank. However, not all consumption is equal, or linear. This service needs to be constantly managed for bandwidth hogs.
For all services in a fast-paced high tech environment, systems need to be robust, high performing and secure. This includes visibility into potential network and application problems that may result from new technology, and the ability to improve the performance of the network. Network visibility and testing solutions are available to help overcome these challenges. The secret is to eliminate network blind spots, perform key network assessments, and harness the power of technology.
So, how does IT overcome these challenges? Regardless of whether the financial institution is a bank, credit union, brokerage firm, investment or insurance company, it begins with a visibility architecture. A visibility architecture is a fancy term for stepping back to take a holistic look at your network, determine what monitoring data is needed, where to collect the data from, and how to pass that data to monitoring and security tools. Visibility architectures typically result in the addition of taps and network packet brokers to capture and filter the monitoring data. Once you do this, you have the data needed to reduce/eliminate many security and performance related issues.
Another key function is to perform network assessments. This includes network security testing, Wi-Fi network testing, and both wireless and wired performance testing. Testing solutions helps identify problems before they become a serious issue. Deploying the right tested technology to replace outdated, manual processes is the best way to achieve long term success.