We’ll discuss the challenges facing the European banking sector, the risks and barriers they face in their digital transformation journey, and how increased agility can benefit them. Managing fraud risk and combating cyberthreats In a cybersecurity article, $10,5 trillion is predicted to be the global cost of cybercrime by 2025. Banks are exposed to high levels of risk from outside the perimeter because of sophisticated social engineering attacks and threats from hostile nation-states. In the past two years, however, it’s been internal threats that have intensified.
Nearly 20 years after he said it. As a security expert and CTO at IBM Resilient, his quote appears prophetic today. The primary target of cyberattacks has shifted from technology infrastructure to humans, as cyberthreats continue to rise on a global scale. Since the COVID-19 pandemic, banks have become increasingly vulnerable to phishing and other cybersquats due to a surge in employees working from home. Ineffective management of processes and controls, for example, could expose banks to malware on shared home devices.
Which is causing banks to disperse work and adapt to technology, security breaches and cybercrime are on the rise, according to the Centre for the Study of Financial Innovation’s “Banking Banana Skins 2021” report. The global payments system could be brought to a halt by a serious incident, in the worst case scenario (though very unlikely).
The infrastructure for remote working was already in place at many banks, but few could have predicted the enormous demand for it. Users must be able to prove their identity to these institutions, and that they’re carrying out their actions according to their profiles. Is their own device being used? Can you tell me what the policy is regarding phones, tablets, and other devices? Technology, people, and processes all come together to provide a solution.
Prevention, detection, and response and analysis, explains Viren Patel of Workday. Whenever possible, preventative measures should be taken first.
Also known as at-the-door authentication, is used to generate secure passwords and to implement good failure policies. Patel says that MFA is also incorporated into the system. In order to properly manage authentication requirements, organizations must understand who their users are, what their roles are, and how these roles vary. The importance of policy reviews and updates over time should be understood by businesses. “Banks must expand their talent pools by taping into skill adjacencies and actively support their employees to develop new skills at speed in order to cope with permanent change.”
Login patterns must be able to be identified. A login report allows organizations to see the IP address, username, and whether or not a login attempt succeeded or failed.
The key to understanding user behavior is also to understand their behavior. Neither bank IT administrators nor auditors should underestimate the importance of understanding how users use their systems. As Patel notes, understanding context and drilling down into specific sign-on details is essential. It is important for organizations to use preconfigured rules to detect suspicious activity. Taking action on user privileges should be triggered by alerts to minimize the time it takes to detect suspicious activity.
This is achieved by creating a culture of security that provides employees with continuous cybersecurity education and training. In order to determine how many employees are clicking on dubious URLs, phishing exercises should be conducted with test emails sent to employees.
Social, and governance (ESG) at the top of its agenda European banks are increasingly focusing on environmental, social, and governance (ESG) in the post-COVID era. A number of stakeholders are putting pressure on banks, including investors and customers. Investors analyze how climate change affects risk and its material impact. In deciding which brands to work with, customers increasingly consider the ethical credentials of banks.
Almost threequarters of CEOs interviewed by KPMG said their ability to anticipate and navigate the shift to a low-carbon, clean-tech economy will determine their future growth. Most banks are having a hard time understanding what the future holds for them.
ESG is all about capturing data and providing actionable insights. Investing in sustainable assets is inevitable, but institutions cannot simply walk away from “unsustainable finance” assets due to short-term profitability requirements. Mapping all those potential consequences requires experience, insight, and data. AI and machine learning help both analyze business data as well as execute on ESG with the help of another set of technologies — artificial intelligence and machine learning. Moreover, cloud-based solutions deploy AI/ML inherently. For the banking industry to transform and to keep focus on environmental, social, and governance issues, three technologies are essential, including cloud computing, data analytics, and artificial intelligence/machine learning.
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