Securing digital transformation in the financial services sector

Published On : 03/02/2021

By Brian McCann, President of Security Solutions, Neustar 

The operational challenges facing IT and security teams in the financial services sector are immense. Established market leaders are up against growing competition from a new breed of FinTech players, forcing them to find ways of remaining relevant in an increasingly digital arena.

This has resulted in many financial services institutions operating a unique combination of legacy infrastructure alongside modern, cloud-based and mobile technologies. However, as organisations across the sector continue to implement new digital transformation strategies and tactics – putting them ahead of companies in other industries – they are also exposing themselves to greater security risks.

While cybersecurity has always been a key focus for the financial services sector, tackling these risks requires banks to implement security measures that will meet the demands of the new environment in which they operate.

Complicated situation

Today’s consumers want omnichannel digital experiences that will support them across their physical and their virtual interactions – from branch to web to app – and it is this that’s driving continued investment in digital transformation initiatives across the financial services sector. The COVID-19 pandemic has only hastened this trend, with lockdown measures and social distancing driving people increasingly online, away from traditional brick and mortar banking environments.

Yet, as banks accelerate their digital transformation strategies, the pace of software delivery and the migration to the cloud, they are also facing the risk of attack by bad actors. Last year alone, for example, almost two-thirds of large financial services companies admitted to being hit by a cyber-attack, with many experiencing a surge in attacks since the start of the pandemic. As one of the most targeted industries, criminals frequently launch attacks on banks’ fast-growing app portfolios and front-end infrastructure with everything from distributed-denial-of-service (DDoS) attacks to more advanced threats such as crypto-mining, zero-day attacks and ransomware. Indeed, such is the level of threat, the FBI issued a warning in June 2020, highlighting the complex security risks faced by banks – particularly in defending their mobile banking customers.

And, as if protecting an organisation and its customers while balancing legacy and cutting-edge infrastructure wasn’t difficult enough, the situation is further complicated by the need to comply with regulations such as the GDPR – especially when those customers are expecting a flawless omnichannel experience.

Intelligent solutions

Brian McCann

Protecting a bank’s infrastructure and its customers requires the deployment of multi-layered solutions driven, like so much else in business today, by data.

IP intelligence, for instance, is gleaned from data on the IP addresses of inbound traffic, and can enable financial institutions to control and distribute traffic to apps securely and intelligently. Turning this intelligence into geolocation and risk insights makes it possible for a bank’s security team to understand the level of risk associated with an IP address as it attempts to gain access to the network, including where the traffic – and any possible attack – is coming from.

These insights enable banks to make informed decisions about the trustworthiness of network connections. Armed with the ability to pinpoint any potential threats to the infrastructure, security teams can prevent them from ever becoming an issue. Conversely, genuine customers can be identified in real time, while access is denied to traffic from risky or unknown IP addresses, stopping bot activity in its tracks. Not only that, IP geolocation intelligence is critical for financial firms bound by regulatory mandates which prohibit access from users in high-risk regions or countries.

In addition to protecting a bank’s infrastructure from malicious traffic, IP geolocation intelligence can also help improve the experience it offers its customers. Imagine that every customer walking into a high street bank wore a label indicating their home postcode, which had been verified before entry. Local customers could be served more quickly with confidence, remote customers could be served with fast, extra identity verification steps, and those with indiscriminate or suspicious postcodes would be redirected to a specialised handling area.

The benefits of IP intelligence are clear. However, it is far more effective when integrated across the full breadth of the security stack, informing and augmenting everything from security information and event management (SIEM) and intrusion detection system (IDS), to web application firewalls (WAF) and DDoS mitigation services.

Secret of success

Increased competition and the impact of COVID-19 have accelerated digital transformation initiatives in the financial services sector. But, as banks and their customers move progressively towards online and mobile, the attack surface has expanded significantly. Banks must protect against opportunistic threat actors exploiting vulnerabilities in customer-facing sites and apps. At the same time, though, they must continue to offer customers the flawless experience they expect.

The success – or otherwise – of their digital transformation initiatives depends on their ability to address this diverse set of challenges. By making IP intelligence a key part of their security posture, financial services institutions can reap the rewards of their investments with greater confidence.

Wanda Rich

Wanda Rich has been the Editor-in-Chief of Global Banking & Finance Review since 2011, playing a pivotal role in shaping the publication’s content and direction. Under her leadership, the magazine has expanded its global reach and established itself as a trusted source of information and analysis across various financial sectors. She is known for conducting exclusive interviews with industry leaders and oversees the Global Banking & Finance Awards, which recognize innovation and leadership in finance. In addition to Global Banking & Finance Review, Wanda also serves as editor for numerous other platforms, including Asset Digest, Biz Dispatch, Blockchain Tribune, Business Express, Brands Journal, Companies Digest, Economy Standard, Entrepreneur Tribune, Finance Digest, Fintech Herald, Global Islamic Finance Magazine, International Releases, Online World News, Luxury Adviser, Palmbay Herald, Startup Observer, Technology Dispatch, Trading Herald, and Wealth Tribune.