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ALL EYES ARE ON YOU – CYBER RESILIENCE REMAINS AT THE HEART OF BANKS’ SECURITY

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By Ed Williams, EMEA Director of SpiderLabs at Trustwave

 

Unsurprisingly, banks and other financial institutions are popular targets for cyber criminals, and so the sector regularly experiences high volumes of attacks. In fact, throughout last year, 70 percent of UK financial sector firms suffered a cyber attack.

These organisations have always been big targets for criminals, back to when physical bank robberies were the norm, but the recent switch to remote working has certainly triggered a surge in cyber activity.  All industries felt the pressure of having to re-establish themselves as remote companies, leaving most fearing the impact of this shift on their cyber security stance. Ponemon Institute’s recent survey found that 57 percent of UK finance companies felt remote working left their employees exposed, with 41 percent fearing that remote workers are putting the business at risk of major data breaches.

With remote working came greater migration to the cloud. This in turn added to the vast avenues that hackers could take to break into the company network. In particular, banking technology has been greatly affected by the advancements made, especially mobile devices that collect and hold sensitive credentials and personal details.

Ed Williams

Unfortunately, not only do banks have to defend against external threats, but also those from within. Around 20 percent of attacks on finance companies originate from internal, financially driven adversaries. Understanding where the primary weaknesses lie in a bank’s defence line is the first step towards strengthening their position.

Let’s break these weaknesses down.

 

Connecting to the cloud

One of the biggest potential weak spots for finance companies is the move to the cloud. If not deployed with the necessary cyber measures and complete understanding of how best to manage security policies, links to the cloud could leave businesses exposed to adversaries waiting just outside the perimeter. It’s important to remember that anything built for the cloud, should also be secured for the cloud.

The promise of cost-effective infrastructure and strong results for customer experience quickly outweigh the potential risks for a lot of companies. And the threats facing banks should not hinder their digital progress. As long as the appropriate security measures are taken, finance companies can advance their systems with confidence.

 

Gaps in the supply chain

Managing the security of your own company is one thing but having to consider the measures taken by all businesses connected to your network is something else entirely. Supply chains are a fundamental part of all organisations, but they also have the potential to unravel the security that a business has worked tirelessly to deploy.

Not only does the attack surface become a whole lot bigger for banks, but they too could become weak points for third party companies. Banks play central roles in business transactions and product imports and exports, so they’re often connected to hundreds of supply chains at any one time. Experiencing a breach could have devastating consequences for the rest of the supply chain as it’s likely all financial activity would cease until resolved.

 

Boosting cyber resilience

With these vulnerabilities in mind, businesses should look to develop their unique and detailed cyber resilience strategy, incorporating the four steps: plan, build, test and run. Jumping headfirst into a security scheme without fully planning each stage in detail could result in elements being overlooked and the entire plan unravelling.

No two businesses are the same when it comes to developing a cyber security strategy. There are so many factors to consider, like size and digital maturity, which will have significant impacts on the overall scheme. Another significant consideration is whether the company still relies on on-premises set ups or if they have transitioned to the cloud. Either way, no further steps should be taken until IT teams have a comprehensive overview of their network infrastructure.

When it comes to testing the different elements of the strategy before the final launch, it’s worth employing external red teams to deliver an in-depth and thorough security and vulnerability report. Red teaming exercises involve security professionals taking on the role of threat actors to test different areas of business security and see how far into the network they can breach, identifying vulnerabilities along the way. The activity is usually very specific and focuses on selected areas of the security barrier. Using an in-house team is also a viable option – the most important thing is to accept any issues that arise and treat them as steppingstones to achieving the top-level security plan that the security landscape demands.

Beyond this, finance companies should consider the role of artificial intelligence (AI) and machine learning (ML) and the benefits they can provide. While there is still some uncertainty around the role that these technologies can play within a business, there is one important point to bear in mind: neither AI nor ML should be deployed for cognitive thinking. Human intuition is a fundamental part of a security strategy, and AI should only be introduced to assist workers in their day-to-day role. This includes freeing up employees to focus on high-value tasks, such as customer experience, as well as managing other more complex areas of security.

 

Security on two fronts

There is a final element that security teams should consider when planning out their defensive strategy. Despite most businesses now operating on the digital plane, physical security remains a vital factor. Most red teaming exercises involve scoping out physical company buildings, which usually hold large numbers of devices. During the first period of mass remote working last year, empty offices were sitting targets for criminals looking to hack the network from the heart of the business. This will undoubtedly remain an issue moving forwards.

From working closely with physical security teams, to keeping access permissions on a restricted list, there are plenty of steps finance organisations can take to strengthen their defences against threat actors. If money does indeed make the world go round, then the institutions at the centre of it all must remain strong and resilient. Keeping malicious attackers at bay must be priority number one.

 

Banking

WHY THE TIME IS NOW TO BANK BEYOND BORDERS

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by Lili Metodieva, MD of Monneo

 

As our world becomes more interconnected, so too does the need for banking systems to follow suit. In the past, businesses and individuals were often restricted to banking in a single country, but the rise of borderless banking is enabling both to benefit from greater financial freedoms. In this article, we will examine why this trend is so important and explain how Fintech companies are helping to make it possible.

 

What is borderless banking?

Simply put, borderless banking refers to any bank account, which allows users to spend, send and receive money across different countries and currencies, without incurring heavy fees. The concept has become increasingly popular in recent years, with more people now working in cross-border job roles and with many businesses requiring capital in a different currency than that of their country of origin.

For customers, borderless banking is making cross-border financial transactions more efficient and cost-effective. Through its rise, businesses and individuals can gain easier access to international streams of capital, which is crucial in this current moment of economic uncertainty. In fact, 74% of companies say cross-border payments have helped their business to survive [1].

 

Where do IBANs come in?

International Banking Account Numbers (IBAN) play a crucial role in facilitating borderless banking. The globally recognised system enables cross-border transactions to happen safely, by providing each international bank account with its own unique 36-digit alphanumerical code. On account of this code, financial institutions can quickly identify where funds are coming from, as well as where they’re going to.

More recently, providers such as us have been able to deliver Virtual IBANs (vIBAN). Working alongside a network of well-established European and International banks, we’re able to offer businesses a single platform interface that consolidates the management of all IBAN accounts. In turn, our multi-currency service makes conducting global financial transactions incredibly straightforward.

 

How has Brexit affected borderless banking?

The COVID-19 pandemic has accelerated the growth of borderless banking and services related to it, but other developments, such as Brexit are beginning to stand in its way. Most notably, the drawn-out withdrawal process has seeded a growing reluctance amongst risk averse, larger organisations to settle transactions using UK bank accounts or IBANs, due to unfounded concerns around regulatory complexity.

Despite leaving the EU, the UK remains a member of the Single Euro Payments Area (SEPA), so it’s unclear why these concerns around British IBAN accounts exist. Regardless, this unfortunate development must be addressed quickly as it has the potential to adversely affect the livelihood of businesses and individuals at a time of critical need.

 

What does the future hold for borderless banking?

There’s clear demand for borderless banking and borderless payments, but the discrimination of certain IBAN accounts represents a major obstacle, which could stand in the way of their widescale adoption. Moving forward, there needs to be a push towards borderless IBANs, which will make international financial transactions more reliable. At the end of the day, this is what IBANs were originally created for, so it’s important the current problems are rectified quickly.

To ensure this can happen, the industry needs protection and clarity from regulators. Likewise, it’s now time for membership organisations to stand up on behalf of the sector and lobby for the financial inclusion of businesses.

If the confusion regarding UK IBAN accounts can be sorted in a timely manner, businesses across the nation, as well as those further afield can look forward to a future of more streamlined and effective financial services. With this support, the diverse sector can deliver further access to innovative financial services and products, which improve outcomes for businesses and consumers alike.

As a sector, Fintech has the potential to provide vital assistance to the wider economy, particularly in an era of increased cross-border business. At Monneo, we’re committed to being part of that change and as a part of organisations like ‘Accept my IBAN’, are working towards reporting and ending IBAN discrimination.

[1] – https://www.mastercard.com/news/research-reports/2021/borderless-payments-report/

 

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Banking

IT’S TIME FOR BANKS TO SIT THEIR CUSTOMERS DOWN AND TALK OPEN BANKING

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Eugene Danilkis, CEO at Mambu

 

We are living in an experience economy, and banking is no different. Customers need innovative payment and finance management solutions. New entrants are edging into the landscape and challenging existing players. This should mean users have a better view of their finances and the tools they need to manage their money – but banks are failing to deliver.

Personal finances are a complex beast, emotional pulls are strong, and the worry of financial security is always on the mind. It’s the job of banks to be the shoulders customers can lean on and trust.

Open banking was supposed to take this to the next level, enabling banks to deliver personalised products and services based on improved data sharing and customer insights. But three years on, adoption remains sluggish. So, why is open banking failing to live up to its promise?

 

A missed opportunity

Open banking was introduced to the UK in 2018, but consumers are still mired in confusion as to what it means and how it helps them. According to Mambu’s global open banking survey, 61% of consumers say they’ve never used open banking, despite more than 8 in 10 using one or more mobile banking apps.

Eugene Danilkis

This is a problem for banks and consumers alike. Lack of understanding around the technology is hindering its adoption, despite this being in the best interests of both. By enabling the secure sharing of financial information, open banking creates an improved customer experience. Not only does this minimise friction and make online payments faster and easier, but allows for personalised services and greater automation, enabling customers to take advantage of tools like budgeting apps.

For banks, open banking is an opportunity to build innovative new products that will improve the customer journey, helping them retain accounts and acquire new ones. By collaborating with third parties, banks can hyper-target customers and build services that address specific user needs, increasing customer satisfaction and in turn brand loyalty.

It’s true there’s been a recent spike in open banking users. According to Juniper Research global, open banking users rose from 18 million in 2018 to 40 million in 2021. But this can be traced to the necessities of a pandemic rather than any sudden clarity in communications.

 

Putting customers at the heart of communication

Mambu’s research shows more than half of consumers (52%) have never heard of open banking. COVID-19 may have increased the uptake of the technology, but it hasn’t increased understanding among users.

So, what can banks do to encourage consumers to embrace open banking? Fundamentally, they must better educate their customers in terms they understand. This means talking to them like human beings, using clear and transparent language to simply explain the personal benefits open banking brings and why it’s really just smart banking.

The understanding gap between technology and terminology shows that consumer demand is there, but better communication is needed. Making sure consumers truly understand the tools they’re using, the control they now have over their finances and how open banking improves the customer experience is vital to dispersing the current fog of confusion. It’s the benefits of this technology that banks need to hone in on: customers ultimately care about what open banking can do for them and how it’s going to make their lives easier.

Centering the customer and their needs in this way will allow banks to fully realise open banking’s potential. The technology has already given them the opportunity to develop valuable services for customers that help build brand loyalty. But the industry has failed to put the customer at the heart of their communications and processes, and show them how much better banking can be.

 

Building trust

Key to reversing this trend is addressing consumer concerns around data privacy and financial safety. Yes, banks need to prioritise simplicity and clarity in messaging, but this isn’t an excuse to shy away from important conversations. Just because there’s an understanding gap around open banking doesn’t mean consumers aren’t switched on about tech and financial issues.

Mambu’s survey found nearly three in five customers have concerns about privacy and security in relation to open banking. So, it’s vital that banks provide reassurance and relevant information about data sharing from the outset if they’re to assuage these fears.

The industry can also encourage greater adoption by developing and improving open banking interfaces. Banks are the gatekeepers to how easily end-users can authorise certain actions, manage third-party access and navigate different open banking functions. If the interface is user-friendly, customers will have a better experience of the technology and be more likely to use and recommend these services.

 

Time to get talking

Customer communication is holding the industry back.. The ability of open banking to transform financial services is a concept that industry players are well-versed in. But the feeling isn’t mutual for customers.

Banks are failing to capitalise on the open banking opportunity by engaging with new and existing customers about what the technology can do for them. Debunking  common myths can open the door to increased growth and trust for banks, as they seek to open up new revenue streams post pandemic..

Make no mistake, open banking isn’t going away. But customers will if banks don’t get talking.

 

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