[BreachExchange] Five IT Challenges Affecting the Financial Industry

[Audrey McNeil]

http://daily.financialexecutives.org/five-challenges-affecting-
financial-industry/

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.
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