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FIXING THE FLAWS IN FINANCIAL SERVICES’ DATA MANAGEMENT

Simon Cole, CEO at Automated Intelligence, a cloud-based data compliance and governance solutions provider to the financial services sector, warns FS firms must address the data issues flagged and created by the Covid-19 pandemic

When the pandemic started, organisations within the financial services sector were faced with three key questions. How do we do homeworking?  How do we go remote?  How do we manage this?

In trying to answer these questions, the business continuity measures taken by FS firms were not up to scratch. Mistakes that could have been avoided were made. To start off with, users had to be given the necessary equipment to make remote working happen and they had to have access to the infrastructure needed, such as broadband. Users also had to have access to the information and data needed to do their job. And this is where they started to run into trouble. While software applications like Zoom and Microsoft Teams made it possible to stay connected, the systems in place were not adequate to facilitate secure data management practices en masse.

These are the downsides that need to be addressed.

 

Where’s the governance?

Historically, firms operating in the financial sector have been slow to adopt cloud technology, preferring to store sensitive data on premise, in order to mitigate perceived risk. As such, through the lockdown, much of the data people need access to is not in the cloud, but is stored in applications or file servers.

Adding to the issue, the VPNs of many organisations don’t have the capacity to allow large numbers of users online. This lack of VPN availability has forced FS firms to allow users access to GDPR sensitive data multiple times, with little or no method of tracking in place.

In order to acquire the information they need to do their jobs while out of the office, employees have been copying, downloading and sharing files that now exist outside of the corporate firewall, without any governance or security considerations. Such data is now, for all intents and purposes, in the wild, making it harder to bring back under control. Teams working remotely don’t have the corporate governance and security protocols that they would have when working in the office.

So, being forced to work remotely, at short notice, has impacted compliance and governance in a very negative manner. The way data is being handled greatly increases the chance of a data breach occurring. It also flies in the face of FCA regulation, and in particular GDPR where personal data is being used. While the FCA might be a little more lax in light of the current challenges right now, this will change when data breaches start to occur and customers start asking questions. Poor choices now will not be a reasonable excuse to avoid future fines.

If this crisis has shown us one important thing, it’s that the slowness of financial services firms in adopting cloud technology, which made it significantly harder for them to access and use data, has hurt business continuity, security and privacy.

 

Better Data Practices

So, how can organisations take control of their data? For many this means deploying it to the cloud in a rapid manner, whilst retaining security and governance practices. It is possible for organisations to make data accessible if the technology is deployed correctly, allowing all the necessary controls to remain in place. Having the short-term decisions correctly in place and making them under an umbrella of good governance and accountability, ensures that you don’t suffer knee jerk reactions and risk losing control of data.

By keeping on top of your data as much as possible, you significantly reduce the opportunity for chaos to happen. That starts with making it available on a safe and secure platform. At a time like this, it is imperative that organisations have a good understanding of their data. Information asset registers should be kept up to date to track where their information is, where it’s being used and the purpose for which it’s being used.

For our clients, we are now using AI to help them assess and understand their data, flag any risks their data is posing to their organisation, and help them mitigate that risk. By implementing the right systems this can all be automated, and there is nothing stopping organisations from doing this with next to zero impact on their userbase.

Remote working is becoming the norm: It has been proven to work and organisations will start reflecting on how much office space and connectivity they really need. As such, organisations are being forced to act now and adapt their data governance and compliance practices to suit the ‘new normal’. Waiting until the pandemic passes is not an option.

Finance

2020: THE YEAR OPERATIONAL RESILIENCE AND CYBER-RISK TAKE CENTRE STAGE IN FINANCIAL SERVICES

Miles Tappin, VP of EMEA for ThreatConnect, explores how financial providers can build a cyber security strategy that enables operational resilience

 

Financial institutions are operating in a new digital landscape. New disruptive technologies – from Artificial intelligence (AI) to crypto-currencies and big data – have driven change and innovation. In retail banking, new fintech providers have seized the opportunity to offer personalised services and challenge existing providers. For example, Klarna, has successfully disrupted the payments sector and is now established as Europe’s biggest fintech firm. It has quickly emerged as an alternative to credit cards since bursting onto scene, allowing consumers to shop now and pay later with retailers, such as H&M, Ikea and Zara.

To compete with the rising number of fintech providers and fulfil growing consumer expectations, traditional financial institutions are developing robust digital ecosystems that can deliver omnichannel service models. However, it’s becoming clear that the pace of technological change is a double-edged sword. It enables innovation and change but it is also one of the most destructive forces in the financial services ecosystem today.

 

Financial services emerge as a hotbed for cybercriminals

2020 has emerged as a defining year for cybersecurity in the financial services industry. It started with an unprecedented attack against Travelex where hackers successfully took some of the currency providers offline for nearly a month. Then came Coronavirus which sparked a new wave of malware and phishing threats. Research from VMware Carbon Black Cloud revealed that threats against financial institutions have surged by 238% since the start of the pandemic.

The renewed interest from cyber criminals comes at a time when regulators are paying close attention to the resilience of the sector. After a string of IT failures and breaches, financial organisations in the UK have been given a mandate from regulators to improve operational resilience. This means ensuring business models can withstand disruptive events from hackers or adversaries and quickly recover to protect the stability of financial systems.

In December 2019, the UK’s financial regulators published a series of consultation papers outlining their proposed approach to achieving greater operational resilience. The proposals suggested that financial institutions will be required to map out the systems and processes that support business services in order to identify any potential vulnerabilities that would pose a risk to the stability of the UK financial system or the firm’s standing.

 

A mandate for change

Where cybersecurity used to be a classic back-office concern, it’s now a central part of digital strategies and a key pillar of both reputation and customer retention – financial legislation leaves no room for failure. All financial institutions need to ensure they have full visibility of their systems and can detect any potential threats.

The challenge for financial institutions is making the security tools they have purchased separately work together in tandem. Security teams buy a firewall, an email filter, threat intelligence feeds, antivirus software or enhanced endpoint protection, and whatever else they need individually. Each of them does a good job but they don’t talk to each other and valuable time is lost tending to individual systems that become a burden to run. At the same time, running multiple security systems is expensive. The more systems you have, the more highly skilled staff you need to manage them, and they’re few and far between.

 

Improving intelligence sharing across borders and communities

To reduce complexity and simplify decision making, financial organisations need to unify processes and technology to harness the security intelligence that comes from across their own security programmes and external sources to drive down risk. However, no financial institution can tackle the problem alone. Experienced threat actors using advanced techniques are constantly targeting the financial sector. The industry needs to come together as a whole to foster a sense of collaboration and data sharing.

In the same way that financial institutions have introduced open banking to deliver a fairer service to customers, the same needs to apply to security – all parts of the financial ecosystem need to unite and share information to learn from one another and succeed in the fight against adversaries that operate across borders.

By sharing alerts on cyber hazards and risk across financial institutions and with law enforcement, government agencies and other relevant authorities, it’s possible to build industry specific insights into cyber security threats and quickly pivot to gain more information on those specific threats and threat actors. By working together, a picture can be painted on threats coming from all manner of malicious activity, from malware to ransomware, to phishing and software vulnerabilities.

 

Breaking down barriers

Having the right intelligence is not enough to ensure that intelligence is turned into action. Breaking down information and process silos across security teams allows financial organisation to analyse and act on the most pertinent information. Everyone has access to the risk and threats that matter most, and orchestration and automation of response helps overwhelmed security teams prioritise response plans and improve efficiencies in their security programme.

Integrating internal security tools and technologies, while also connecting to external sources of intelligence, creates a single source of intelligence that feeds operations and enables organisations to direct action against the threats that matter most. The outcomes of those actions further feed intelligence, providing the ability to further refine the efficacy of the entire security lifecycle.

This approach provides a continuous feedback loop for the people, processes and technologies that make up the security programme. It allows financial institutions to keep up with threat actors that have consistently adapted their methods to profit at the expense of the financial industry. Something that won’t stop anytime soon.

 

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Finance

GROWTH OF FINANCIAL MARKETS AND TECHNOLOGY

Ashish Jain,CEO, Future FX

 

The economic development of any nation completely depends on its financial structure both in long term and short term. The financial system and its efficiency determines the success of the nation in terms of economic growth.

As most of the sectors are taking advantages of the technology evolved since 1980, financial sector has also transformed immensely.

The Bombay Stock Exchange (BSE), dating back to 1875, started as a broker’s forum under a tree on Dalal Street, and is Asia’s oldest stock exchange. For over a century, registered brokers have made trades happen.

The National Stock Exchange (NSE) came up in 1994 to provide screen-based electronic trading. It gave fibre-optic access to brokers in other cities who could join the trading in the centralized exchange located in Mumbai.

Dematerialization of shares started in the late 1990s and online trading began at the turn of the millennium where investors could buy and sell shares through electronic brokers such as ICICI Direct and Sharekhan.

As more and more elements of the stock market get digitized, it increases its potential to attract a new generation of investors.

Online financial services company Zerodha brought “discount broking” to India in 2010, applying a flat fee of ₹20 on a trade whatever its size. This attracted young investors who could do a trade in less commission. Now, we have all the marketing and trading apps on our phones and we can easily make trades.

The insurance sector has eliminates the role of broker and now anyone can buy insurance through mobile phones. Some such apps are HDFC ERGO insurance, Insure, Caringly Yours, etc.

Trade has always been shaped by technology but the rapid development of digital technologies in recent times has the potential to transform international trade profoundly in the years to come.

From the moment we wake up to check how the markets performed overnight until the time we go back to bed before doing another check of how the market is set to open on the other side of the globe, technology now plays a critical role in everything we do and the way we do things.

For the financial markets, the coming of advanced technology has been the key factor behind the transformation in the way things are done. Technology is also at the core of how companies operate and maintain their competitive edge in this vicious environment.

While forex trading and trading in general used to be the domain of institutional and corporate players, today even retail and private investors consider forex an essential component of their overall portfolio. And this is no doubt due to the ease of access and price transparency offered on the electronic platform.

Nowadays, providers need to have the latest technology all the time. They need to add new and build more features to their platform to attract and retain clients.

Traders are now able to monitor their trades from anywhere as long as there is an internet connection. This gives traders more freedom, mobility and flexibility.

The trading in global markets has thus become easy and convenient like never before.

 

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