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Compliance in financial services doesn’t necessarily mean being secure

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Mark Guntrip, Senior Director, Cybersecurity Strategy at Menlo Security

 

Most regulations tell an organisation what they need to protect, whether it’s a certain classification of data, remote system, or user, but they rarely indicate how they should meet these requirements.

So, a law might say that companies dealing with personally identifiable information (PII) use strong passwords, but the regulations often fail to define what makes a password strong – a certain number of characters, a mix of letters, numbers, and symbols? Perhaps passwords are strong only if they are paired with multi-factor authentication (MFA)? Typically, it’s up to the security team to make that determination. Whether they follow the National Institute of Standards and Technology (NIST) or the MITRE Att&ck Framework, security professionals can access very robust and specific guidelines for how to identify and stop malicious activity.

But being compliant with all the appropriate regulations doesn’t necessarily mean that an organisation is protected from malicious actors. A company’s security posture is dependent on how the security team has chosen to meet the requirements. However, as compliance regulations evolve, financial services organisations can find the goals of maintaining compliance and enforcing security are being pushed closer together.

Rather than the traditional separation of compliance and security, companies are finding that they can achieve better results and economies of scale by combining both teams under leadership from the CIO. This allow them to go from securing their workforce to ensuring that their products, services, supply chain and partner ecosystem are protected from malicious activity.

What makes things difficult is the fact that larger financial services organiations have many departments with lots of users who all require different security access. A cashier in a bank branch may have no business connecting to the Internet, while a mortgage adviser might need to check third party sources for up-to-date information. These roles might also be impacted by different regulations making it even more complex. Traditionally, these different requirements would require separate hardware and networking — an architecture that leads to greater complexity.

A Zero Trust approach

Remaining compliant while protecting against evolving threats is a balancing act for organisations in the industry. Many take a Zero Trust approach to security, which turns traditional ‘detect-and-respond’ to cybersecurity on its head. In simple terms, instead of trusting everything except known threats, Zero Trust assumes that all content and users are untrustworthy. One way to reach a true state of Zero Trust is leveraging isolation technology.

Isolation enables a context-aware approach by ensuring trust between connecting entities. Along with other security controls, such as a web proxy, data loss prevention, or anti-malware tools, isolation ensures security and compliance by verifying that everyone is who they say they are, and that they are accessing only the information, applications and systems they need to do their job.

Three ways that isolation can help organisations accelerate the security/compliance convergence:

  1. Ensure complete visibility and control over managed and unmanaged assets.

Isolation provides companies with the visibility and control they need to ensure security and maintain compliance of both managed and unmanaged assets. Running all web traffic through an isolated layer in the cloud ensures that no malicious activity can force that initial breach on a connected device and then spread through the network. As web- and email-based threats become more sophisticated and use advanced evasion techniques, organisations need to stop relying on a flawed detect-and-respond approach to security and focus on prevention.

  1. Rely on cloud-native technologies.

Cloud-native isolation solutions allow organisations to ensure this visibility and control at scale without impacting the user experience. They can simply expand security controls wherever they do business — whether in a remote branch, a customer site, or a conference centre. This ability makes it possible to ensure security controls travel across borders and regulatory jurisdictions — effectively connecting compliance requirements with security posture.

  1. Extend security to vendors, tools, and the entire supply chain.

Successfully connecting security and compliance allows organisations to go beyond just maintaining a secure business. Having the framework in place to ensure compliance and security together makes it possible to extend security strategies to the products and services they are providing, all the way through the supply chain and partner ecosystem. Isolation ensures that a vulnerable partner doesn’t compromise a network, or a ransomware gang is unable to use a Software-as-a-Service (SaaS) platform to gain access and take down the network. A Zero Trust approach powered by isolation ensures trust between connecting entities — no matter who they are or who controls the asset.

For financial services, the convergence of regulatory requirements and security goals can help combine previously disparate teams and streamline efforts. A Zero Trust approach can help them gain visibility and control over managed and unmanaged devices, follow security controls and compliance across borders, and extend security across the entire ecosystem.

Finance

astrantiaPay Selects SaaScada to Enrich Swiss Landscape of Business Payments and Fill Market Gap

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Swiss financial firm, astrantiaPay, to use SaaScada’s cloud-native core banking engine to simplify cross-border payments for SMEs and facilitate international trade and services across the old and new economies

 Cloud-native core banking engine, SaaScada, today announced it was selected by astrantiaPay to launch a Swiss point of contact for international businesses looking to open and run corporate bank accounts in Switzerland. Once regulatory approval is in place, astrantiaPay will provide mission-critical payment services to sophisticated Swiss, European, and global companies.

“Promoting SMEs is high on the agenda of policymakers, but the reality is very different when dealing directly with banks. In fact, financial institutions often show little or no appetite for low-margin, labour-intensive company accounts with regular cross-border payments”, explains Lukas Wissner, CEO of astrantiaPay. “As a result, opening and maintaining corporate bank accounts can become a complex and costly procedure, posing a real challenge for Swiss and European start-ups and established businesses. This can hinder growth, and sometimes even threaten a company’s existence. Ultimately, corporate bank accounts with a foreign nexus are an underserved niche segment in the Swiss financial ecosystem which is historically dominated by asset managers and private banking.”

SaaScada is an industry-proven core banking system that unlocks trapped customer value, mitigates risk, and drives real-time data insights. It was founded from a desire to provide first-class financial services capabilities for everyone. SaaScada’s configurable product features and transactional ledgers can be connected to any payment scheme, gateway, channel, or FX provider. Its event-driven architecture will provide astrantiaPay with a real-time stream of events for each company account.

“SaaScada’s experience and deep understanding of how to execute a bank in the Swiss financial and regulatory landscape convinced us,” concludes Lukas Wissner. “Looking back, SaaScada was the right starting point on our integration journey, as its experienced team of programmers readily enable open API connections to virtually any data source and endpoint; be it software tools for onboarding, client relationship management (CRM) and transaction monitoring (TM), or accounting systems, payment aggregators and international correspondent banks. Leveraging SaaScada’s proficiency and infrastructure has helped us create an organic whole.”

“Lukas Wissner and the team at astrantiaPay have a distinct vision to make bank account opening simpler for international SMEs,” explains Nelson Wootton, Co-Founder and CEO at SaaScada. “SaaScada is delighted to support astrantiaPay in driving financial inclusivity for its customers, solving complex compliance challenges, and enabling SMEs to thrive.”

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Banking

How Biometric Payments Are Tackling Financial Exclusion

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By Catharina Eklof, CCO, IDEX Biometrics

We are moving closer to a cashless society: 89% of payments in the UK are contactless and, globally, contactless payment transaction values are set to surpass $10 trillion by 2027. Ease, convenience, security, and inclusion have accelerated the transition away from cash. However, many of today’s current payment solutions are leaving entire cross sections of society behind: including the most vulnerable, underserved, and unbanked populations.

Developments in the payment sector over the past decade still aren’t a perfect fit for all. Those suffering from dementia, literacy challenges, or impaired vision can find current payment methods – with a PIN to remember – extremely challenging. Financial inclusion requires us to make payments accessible to all demographics. Though the financially excluded represent minorities, they account for an estimated 1.7 billion people – almost a third of adults globally.

Enabled by huge advances in technology, our evolving social dialogue has become accelerated and unfettered, on a global scale. It is critical to harness technology as a force for dynamic economic improvement: democratizing access to banking and payments. As such, we need to look beyond mobile wallets or digital payments and support those in need of easier access to payment and fintech solutions. A more inclusive form of payment technology is essential.

Catharina Eklof

 

Personal Identity as the New Pin Code

Many communities remain vulnerable or underserved by the functionality of traditional payment solutions such as bank cards. These products are, at their core, only linked to the owner by way of name and signature, offering limited security and protection. With contactless payments, no link whatsoever is required to a card for payment.

In an increasingly contactless society, fraud and digital security are growing concerns. Credit and debit cards can be used by anyone, and card readers don’t understand if cards have been apprehended illegally. Vulnerable groups may also struggle to input their credentials into what can be, for some, a complex system. Empowering those vulnerable groups therefore means providing them with the independence to access payments with greater ease.

Biometric payment cards play a significant role in bridging the gap between the financially underserved and the financially included. Simple and secure financial authentication, like facial or fingerprint recognition, allow payments to become about who a person is rather than what they know or remember. If individuals can be personally linked to a payment card via biometrics, it can address the significant 1.1 billion people worldwide who are currently without official government identification or access to it. In Nigeria alone, 149 million individuals lack the legal means to evidence their identity, while in South Africa, 12 million individuals are excluded from the country’s formal identity system.

Fingerprint authentication has the added benefit of optimizing security, in that it requires the individual to opt into a purchase, avoiding any issues of unauthorized or unintentional payments from having a reader placed near the card owner’s face. This provides increased independence for the blind and visually impaired, who account for an estimated 2.2 billion people globally, as it allows for seamless payment authentication without sensory barriers. Similarly, biometric smart cards can be transformative for more than 55 million people living with dementia and Alzheimer’s, as it enables access to payment without the difficulty of remembering passcodes.

Literacy is also a little talked about hurdle to inclusion. Globally, there are 750 million “functionally illiterate” individuals struggling to use and understand financial products. Across all levels of education, biometric authentication is a universally inclusive concept. It is easy to communicate and understand that one’s fingerprint is inherent to their identity, and can act as a form of verification. Biometric smart cards facilitate and secure payments with ease by simply requiring their fingerprint to instantly authenticate their own card.

 

Pushing on With Progress

Even the most reluctant individuals are likely to have succumbed to contactless payments and some form of digitized banking in recent times. This will have the positive impact of making the needed transition to biometrics more seamless. Using fingerprints or facial recognition to unlock phones or access apps is not unusual. If anything, they have been convenient and comforting additions to the surge of tech innovations over the last couple of decades. There is a relief in knowing that these portals are being secured by methods that are almost impossible to replicate.

It is a breakthrough that financial players and governments in the world’s most developed countries still need to catch up with, as emerging economies have already capitalized on biometrics’ capabilities for almost a decade now. In India, for example, internal fraud and leakage from pension payments dropped by 47 percent after transitioning from cash to biometric smart cards. Because the solution bypasses the need for prior credit ratings or credentials, the country has also been able to catalyze safe online banking among previously unbanked adults since biometrics’ introduction in 2014.

Meanwhile, in Pakistan, the total number of mobile wallet accounts tripled from 5 to 15 million in 2015, with an estimated 50 percent of new registered mobile wallet accounts opened using biometric authentication. This was a result of Pakistan’s National Database and Registration Authority’s (NADRA’s) effort of collecting biometric information to allow for more convenient and democratic account opening processes.

Many around the world have been marginalized by both the pace of change in banking and the solutions that have, to this point, been created to accommodate such change. With the mass adoption of biometric smart cards, the same benefits seen in India could be realized on a global scale. If we take on the opportunity in front of us – promoting solutions like biometric smart cards to increase accessibility to the global economy – we will foster a digitally-focused, equitable and inclusive society. This doesn’t just mean ease and convenience, but also security for all and financial inclusion of those who have been left out of digital evolution, until now.

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