By Hiten Mistry, Chief Revenue Officer, Venari Security
Financial institutions are now responsible for preserving and maintaining the privacy of an ever-growing myriad of datasets across a multitude of stakeholders. Governments and regulators are also mandating organisations within the industry implement best-practice encryption, with financial ramifications for data leaks. Breaching GDPR rules alone can lead to fines of up to 4% of global annual turnover, so it is essential that financial institutions understand the importance of choosing effective security solutions.
This has driven a massive uptake in encryption to ensure compliance and the support of customer data privacy while in transit and at rest, with 62% of the top 1,000 global websites now supporting TLS 1.3 – the current standard ensuring strongly encrypted communications. However, this unilateral shift has also weakened the visibility that security teams have over their networks – and this is becoming a growing issue.
Organisations need therefore to now look to Encrypted Traffic Analysis (ETA) as a more sophisticated solution, offering insight into their data without compromising on workload.
Hiding in plain sight
With financial institutions playing such a critical role in our society, there’s no room for uncertainty around the protection of data. We are seeing an increase in geo-political tensions and cyberattacks, and with finance being a part of the UK’s Critical National Infrastructure, it remains a major target. Indeed, in the first three quarters of 2021 alone, threats over encrypted channels increased by 314% from the previous year. While banks and other financial services may have perceived encryption as the ultimate solution to their data privacy concerns, in cyber security there is no silver bullet. And not having an oversight of the transfer of data across networks, increases the risk of attack.
We are increasingly seeing attackers that breach an organisation’s perimeter are able to hide malicious activity within legitimate encrypted network traffic. These attacks aren’t necessarily cutting edge, but the lack of visibility into encrypted traffic gives intruders a far easier path to operate on private networks. So, active decryption and inspection could be the answer. However, trying to decrypt vast traffic volumes and managing keys and certificates introduces significant costs and logistical complexities. This issue is compounded by modern-day encryption protocols which use Perfect Forward Secrecy, forcing strong encryption between the client and server.
Despite these high levels of regulation, there are a multitude of reasons why an organisation may not have complete oversight of their encrypted estate. Sometimes changing teams readily accept legacy infrastructure, or – more commonly – nobody ‘owns’ or is accountable for encryption responsibilities. Sometimes actions can be too little, too late, with weaknesses in the system only becoming apparent when a breach takes place.
Reaction not recovery
The only way organisations can hope to reduce this risk, is if they can measure and understand the encrypted communication on network traffic without relying on decryption. To achieve this, security teams need to shift their approach towards a deeper analysis of encrypted communications, guaranteeing greater certainty about what is happening within encrypted traffic flows.
Encrypted Traffic Analysis (ETA) is an emerging method of identifying and detecting suspicious or anomalous behaviour hidden in encrypted traffic without decryption. It uses a combination of artificial intelligence, machine learning, and behavioural analytics to analyse encrypted traffic without decryption. It ultimately improves encrypted network traffic visibility while causing no impact on latency or privacy infringement. It also understands the behaviour of traffic across networks and provides alerts in near real-time, allowing security teams to react immediately rather than after the fact. This significantly increases the rate at which suspicious activity can be identified in encrypted traffic, thereby reducing business risk.
The network visibility gained by employing an ETA platform can also help organisations to ensure that their encrypted estate is as secure as they intend. Many organisations will use static analysis to understand the certificate, but this approach does not provide critical information required on what is actively negotiated and used for the individual sessions.
Visibility is a virtue
The shift from ‘decrypt and detect’ to ‘measure and mitigate’ is a welcome one and will have just as much impact on the sector as when encrypted communications were introduced. Ultimately, the risk posed by customer and employee data breaches will be further reduced, offering peace of mind to financial organisations.
The current global climate, with a rise in nation-state attacks, has put critical sectors like finance on high alert. To successfully guard against potential threats, it is imperative that security teams have as much visibility of their network as possible.
Harnessing Encrypted Traffic Analysis will ensure these concerns can be effectively dealt with, offering enterprises peace of mind, by understanding what is happening in the present, to mitigate against the risk of a data breach in the future.
Digital Banking – a hedge against uncertainty?
Ankit Shah, Head of Digital Banking, Apex Group
The story of the 2020’s thus far is one of crisis. First the world was plunged into a global pandemic which saw the locking down of people and economies across the world. Now we deal with the inevitable economic consequences as currencies devalue and inflation bites. This has been compounded by Russia’s invasion of Ukraine and subsequent energy politics.
And the outlook remains uncertain. Tensions continue to build between China and Taiwan and inflationary conditions are forecast to continue well into 2023. This uncertainty is impacting everyone, and every sector. And finance is no exception with effects being felt everywhere from commodity and FX markets to global supply chains.
But it’s not all doom and gloom. Rollercoaster markets and an ever-evolving geopolitical situation have made 2022 a tricky year far, but, despite the challenges, digital banking has proven resilient. In fact, the adoption of digital banking services has continued to grow over the last few years, and is predicted to continue.
So, what are the forces driving this resilience?
In an increasingly digital world and economy, digital banking comes with some advantages baked in, which have seen the sector continue to succeed despite the tumult in the wider world. In fact, the crises which have shaped the decade so far may even have been to the advantage of digital banking. Just as during the pandemic, technologies which could facilitate remote working saw a huge uptick in users, so to digital banking is well suited to a world where both people, and institutions demand the convenience that online banking services offer.
And while uptake of digital banking services is widespread amongst retail consumers, a trend likely to continue as digital first generations like Gen Z become an ever-greater proportion of the consumer market, uptake amongst corporate and institutional customers has been slower. This is largely down to a lack of fintech businesses serving the more complex needs of the institutional market, but, in a post-Covid world of hybrid working business, corporate clients are looking for the same ease of use and geographic freedom in their banking that is enjoyed by retail consumers.
This is not just a pipe dream – with the recent roll out of Apex Group’s Digital Banking services, institutions can enjoy the kind of multi-currency, cloud-based banking solutions, with 24/7 account access that many of us take for granted when it comes to our personal banking.
One significant difference between retail and business accounts however, for banking service providers, is the relative levels of compliance which are needed. While compliance is crucial in the delivery of all financial services, running compliance on multi-million pound transactions between international businesses brings with it a level of complexity that an individual buying goods and services online doesn’t.
For digital banking services providers, this situation is further compounded by guidance earlier this year from HM Treasury – against the backdrop of the Russia-Ukraine conflict- requiring enhanced levels of compliance and due diligence when it comes to doing business with “a high-risk third country or in relation to any relevant transaction where either of the parties to the transaction is established in a high-risk third country or with a sanctioned individual.”
So, can digital banks meet these standards while also providing institutions with the kind of easily accessible, mobile service which retail customers enjoy?
The answer is yes and again, once initial hurdles are overcome, digital banking brings with it features which give it the edge over traditional banking services. Paperless processes, for example, mean greater transparency and allow for better and more efficient use of data. This means AI can be employed to search documents, as well as provide verification. It also means compliance processes, often notoriously complicated, become easier to track. Indeed, digitising time intensive manual process means the risk of human error in the compliance process is reduced.
Digital banking can also better integrate transaction monitoring tools, helping businesses identify fraud and irregularity more quickly. This can be hugely important, especially in the times of heightened risk we find ourselves in, where falling foul of a sanctions regime could have significant legal, financial and reputational consequences.
Our world is increasingly globalised, and so is business. For corporate and institutional banking customers, being able to operate seamlessly across borders is key to the operation of their business.
This brings with it challenges, which are again compounded by difficult geopolitical and economic circumstances. In recent weeks for example, we’ve seen significant flux on FX markets which can have real consequences for businesses or institutional investors who are buying and selling assets in multiple currencies and jurisdictions. The ability to move quickly then, and transact in a currency of choice, is vital. Advanced digital banking platforms can help – offering automated money market fund sweeps in multiple core currencies to help their clients optimise their investment returns and effectively manage liquidity.
Control admin uncertainty
In times of uncertainty, digital banking can provide additional comfort via customisable multi-level payment approvals to enhance control of what is being paid out of business accounts, with custom limits available for different users or members of a team. Transparency and accountability are also essential, with corporate clients requiring fully integrated digital reporting and statements and instant visibility with transaction cost and balances updated in real-time.
For some, the perception remains that digital banking is the upstart industry trying to offer the services that the traditional banking industry has built itself upon. Increasingly however, the reality is that the pressure is on traditional banks to try and stake a claim to some of the territory being taken by digital first financial services.
With a whole range of features built in which make them well suited to business in a digital world, digital banking is on a growth trajectory. Until now, much of the focus has been upon the roll-out of services to retail consumers, but with features such as automated compliance, effortless international transactions and powerful AI coming as standard for many digital banks, the digital offering to the corporate world looks increasingly attractive.
Redefining the human touch with digital transformation
Simon Kearsley, CEO of bluQube
It may not be a new phrase, but digital transformation is still inducing anxiety amongst 80% of employees. Reigniting the conversation around the future role of the human workforce, the COVID-19 pandemic caused 47% of business leaders to implement new technologies, and a further 29% to develop plans to do so in the near future.
Creating increased efficiencies, cost savings, and improved customer service, several new technologies are becoming ingrained within core business operations. For example, the capabilities of cloud computing have enhanced the customer experience, and many companies are also using this to digitise their supply chain. Likewise, the combination of artificial intelligence and big data can also be used to automate nearly 80% of physical work, and 70% of data-processing.
In the digital era with so many new channels for communication, the ability to receive valuable insights from customers has in practice never been greater, which can in turn be used to inform future planning. Leveraged properly, this means that technology can drive benefits and growth for not just businesses, but also their customers and even their workforce. As technology empowers staff to transition their roles from more onerous, repetitive tasks towards impactful decisions within their organisation, this encourages the workforce to better realise the value of their contributions.
A data-driven workforce
When businesses embrace data-driven digital technologies, process optimisation across various sectors of the organisation occurs. For example, digitally-led automation, such as the use of OCR software, has been able to take over many time-consuming manual tasks, including data-entry, re-keying, and core administration roles. Although tasks of this nature may have formed a large part of some employees’ roles, this doesn’t mean that anxieties around the purpose of their job must increase.
Optimisation across the business isn’t limited to processes and costs, it also extends throughout the workforce. Less monotonous roles mean that employees are free to take on strategic roles that form a more rewarding career. In practice, this access to enhanced data empowers employees to expand beyond the limited resources they have for decision-making, instead leveraging the insight collected by analytics to make more informed decisions.
By replacing repetitive tasks, staff are becoming increasingly involved in the ideation process for new products and how to improve the company’s existing services. Besides the clear benefits this has to daily productivity and efficiency, staff are equipped with the tools to more clearly demonstrate their contribution to the business and, in turn, provide greater scope for progression.
As investment in data-led solutions continues and traditional roles are reshaped around its impact, employees’ digital skillsets will act as a key driver within the talent market and generate career progression that staff may have previously felt was unattainable. However, this outcome for staff will only be achieved if managers and senior members of the company are open to change and flexible enough to evolve alongside digital transformation. Technology adaptations are inevitable, and as its organisational applications continue to expand, managers would be wise to support new digital initiatives to remain ahead of the competition.
The business value provided by enhanced insights into customer preferences and behaviours cannot be overstated. With a clear overview of key behaviours, business leaders can accurately determine which areas of their processes need to be streamlined, where to focus their efforts, and how to attain the greatest possible value. On this basis, employees’ contributions will be vital for driving fundamental changes across the business, including roles in strategy development and operational management. Likewise, employees will be free to develop new product ideas and ways to improve the current service offering to benefit the business on a wider scale.
Amidst ongoing economic constraints, it has arguably never been more important for businesses to implement sustainable technologies that support their ability to respond to changing circumstances. Indeed, the insights discerned from employees’ data analysis and increased team collaboration are essential for reducing the risk of costly errors for the business.
In the coming years, AI-backed automation will become a key driver for technological change. As AI systems learn how to fit into the organisation and are programmed to improve over time, this encourages a greater focus on people on the long term. Not only should this reassure employees of their value, but it should also reassure managers that their investment was worthwhile.
Further reinforcing the value of a data-led workforce is the customer preference for real, human customer service – the value of which remains remarkably high. This is recognised by the vast majority (90%) of business leaders, who believe that the human touch of customer service has become even more important amidst advancing technology, with 40% describing the continued human touch in customer service as a ‘100% mission critical focus.’
Experienced across virtually every industry, many companies may have temporarily seen customer service levels slip during the COVID-19 pandemic. However, technology is able to reverse this trend, supporting the human element of customer service with high-value data and insight. This enables teams to make decisions based on what they have learnt from evolving customer data and feedback, which can then be leveraged to improve the customer experience on an ongoing basis.
An additional benefit of digital transformation for customer service teams is that technology streamlining businesses’ operations in turn frees up organisations to provide the other crucial strand of the human touch, with dedicated customer service teams to personally connect with customers.
The bottom line
Simply enough, data-led technology significantly benefits business leaders, employees and customers alike. Achieving just base-level insights increases job satisfaction and security, encourages client retention, and instils confidence in customers that they are receiving a high-value service. For the four out of five workers that remain anxious about the implementation of digital technologies, it must be remembered that these advancements create an exciting opportunity for the human touch to grow alongside them.
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