What Is The Biggest Challenge In Security For Financial Services?

What Is The Biggest Challenge In Security For Financial Services?
  • Opening Intro -

    As the digital world grows, the most significant security challenges for financial services have also changed.

    Today, the security perimeter no longer stops at internal networks but also includes millions of connected IoT and mobile devices.

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As a result, organizations must educate their employees and clients on malware and how to combat it to address this challenge. In addition, insider threats have been a significant source of security incidents within the financial services industry, resulting in loss of intellectual property and reputation damage.

One way to combat this problem is to implement workforce security awareness training. You can learn more at https://www.fortinet.com/solutions/industries/financial-services.

Managing data

Managing data is a perennial problem for financial services companies. While many firms maintain data silos or federate data, other issues persist.

These include high data storage costs, discrepancies between different error-prone data sets, and compliance penalties. In addition, firms are increasingly looking to simplify their data management environment and implement new technologies.

As a result, financial services organizations are turning to artificial intelligence (AI) and machine learning (ML) solutions to tackle this issue.

For financial services firms, the biggest challenge is managing data across multiple vendors. While the number of vendors used by these companies may vary, most are connected to financial service firms.

As a result, managing data across these various partners is challenging, which could result in mistakes in data security. One way to mitigate these problems is to reduce the number of third-party vendors and ensure that all use robust security measures.

Managing non-financial risks

Banks must learn to address non-financial risks. ERM frameworks and risk appetites developed for financial services should include non-financial risk.

For this to be effective, banks must establish specific business-related views and apply useful metrics across the organization.

In addition, banks should develop a more practical approach to risk governance by adopting practices successfully adopted by leading corporates.

The best practice is incorporating non-financial risk management into an overall risk management approach. By integrating non-financial risks with traditional risks, financial institutions can more effectively manage and mitigate their overall risk profile.

For example, technology is used to renew insurance policies. A company can use it to track the performance of individual assets and identify risks across multiple purchases.

While some regions have invested more in developing non-financial risk management capabilities than others, the European part is ahead in this field. The continent is making progress in ESG and climate risk management, while APAC has largely failed to invest in preventing pandemics.

However, APAC institutions have not yet made significant investments in addressing climate risk. Still, they plan to focus on digital disruption and climate change as top priorities in their security plans.

Managing nation-state attacks

In the past, third parties have responded to cyberattacks using denial-of-service and other techniques. Companies increasingly rely on advanced threats such as nation-state malware to compromise financial systems.

But these attackers can also target physical systems and steal sensitive industrial secrets. Companies can put the issue on their customers’ radars by educating customers. In addition, companies can share their best practices with third parties to protect themselves from nation-state attacks.

Despite the growing sophistication of cyber threats, few firms have fully developed a comprehensive defense against such attacks. However, the capabilities and willingness of nation states to target global financial services infrastructure are evident.

In 2016, for example, North Korea’s cyber attacks were highly connected to the U.S. sanctions regime. Pyongyang exploited vulnerabilities in the global messaging system SWIFT to finance its nuclear weapons program.

In 2016, the North Korean military-backed Carbanak group targeted financial institutions to steal $1 billion from several countries. In 2017, the country’s Far Eastern Bank was attacked by North Korea.

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Managing advanced persistent threats

The most challenging aspect of modern cybersecurity is the ability to prevent and detect such attacks. This is particularly true when advanced persistent threats (APTs) are involved.

These malicious actors are often sophisticated and lack state ties but follow similar attack patterns. They choose their target and determine the best way to penetrate systems, expand their access, and complete their objectives. Once they have access to critical systems, they must also avoid detection.

APTs are challenging to detect because they are based on immutable or disposable infrastructure. As a result, they are often undetectable by signature-based security tools.

To counteract APTs, security professionals must implement encryption and effective monitoring and logging. Additionally, they must audit access permissions to sensitive information.

Advanced persistent threats are an example of an ongoing attack, and they can be characterized by changing their IP address and other indicators of compromise.

Image Credit: security for financial services by envato.com

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