A common thread – or concern – with technological developments in finance is cyber security. Will these technologies strengthen or hinder the protection of systems and consumers’ data?
For financial service providers and regulatory authorities alike this is a burning question. Reputations are on the line and lost consumer trust is difficult to regain, aside from the potential fines from regulators for mishandling personal information. The industry needs to address security weaknesses and vulnerabilities in all their systems, not least the emerging technologies they are leveraging.
In 2017, the banking and financial sector suffered 134 separate data breaches, almost triple the number for the year before. By the half-way mark in 2018, banks had been hit by another 84 hacks, putting the industry on course to continue a negative trend.
As the number of computer systems globally grows exponentially – and businesses, governments and individuals become ever more reliant on them – so does the need for robust cyber security to protect them and keep our data safe.
A shift to the cloud
Many organisations have started transferring their IT infrastructure to the cloud in order to reduce costs. Because cloud storage systems are constantly evolving, they are the perfect space for innovation in cyber security to deal with new threats, business operational problems and system infrastructure challenges. This gives banks further reasons for moving systems to cloud-based platforms like OracleFusion.
Boasting “the world’s largest knowledge base of data,” the corporate name Oracle seems apt. It claims the top 20 banks, top 10 aerospace and defence companies, top 20 governments, and top 20 high-tech companies as customers. For them, security is a primary concern, Oracle stresses.
Consumer demands for instant access to financial services on the go and the shift to Open Banking and sharing of detailed information about our financial lives could leave customers’ data in a more vulnerable position.
Cyber security needs more than a traditional approach
Traditional approaches to security risk management and protection of data and infrastructure, such as monitoring firewalls and endpoints, have failed to prevent breaches. Accordingly, cyber security has shifted towards a more preventative approach such as penetrative testing, where simulated cyber-attacks are used to find weaknesses, flaws and vulnerable access points.
Regulatory bodies must strive to keep pace with the increasing risk of cyber-attacks as they update regulations and compliance processes to anticipate the threats from agile cyber criminals. Blockchain holds out the prospect of a more secure technology for highly regulated industries such as banking, due to the technology’s ability to filter system or network security activities in real time and identify manipulated data.
Investment in this area will continue to grow. Global market intelligence firm IDC predicted compound annual growth of 11.4% in spend on security solutions from 2016 to 2021. The imperative for getting cyber security right is compelling.
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