Monitoring, detecting, and addressing potential cybersecurity threats is a top priority for any financial firm—and for good reason.
Data breaches in the financial sector can cost millions—even billions—of dollars. They can also threaten a bank's reputation and disrupt the livelihood of hardworking clients. Yet today's savvy banking client expects new and novel ways to interact with their financial institution—and cybercriminals are constantly adapting new ways to steal sensitive information from these institutions.
Fortunately, even though hackers keep getting more innovative, so are the good guys—creating new technologies and systems that can bolster a bank's defenses and keep these criminal characters out of the picture.
What are the new technologies in the banking sector? Check out these five technological trends to watch in 2020 and beyond that will be important to prepare for.
Payment platforms and other third-party services utilized by banks often come with major vulnerabilities. These were the exact points of entry for hackers involved in a few of the more infamous data security breaches within the past few years, including an $81 million cybertheft from Bangladesh Bank in 2016 and a 2019 data breach at Westpac in Australia involving nearly 100,000 customers.
To mitigate risk associated with third-party vendors, banks should rely on IT consultants and technologies to increase third-party risk management. This may include enhanced examination of application programming interfaces (APIs) and remodeling of their existing security infrastructures.
Artificial intelligence (AI) technology offers many cybersecurity benefits to banking institutions as well as their clients. Expect cutting-edge AI technology on the horizon that can efficiently and effectively monitor user behaviors and provide algorithmic customer profiling across multiple locations, devices, and banking features at once.
Open banking is the ongoing creation of new encrypted software and security systems that give customers and small businesses the option to share their account information directly and securely with other banks, lenders, and additional companies. The movement has already happened in earnest in Europe. Keep an eye out for more widespread regulations and standards from the U.S. Department of Treasury should open banking become more mainstream here.
Many industries are seeing increased reliance on IoT devices and software that can speed data transmission and information sharing. And the rising prevalence of the 5G cellular network is poised to accelerate these smart devices and technologies even more.
As a financial institution, be prepared to integrate new controls and policies to ensure that your extended IoT network—which could be rife with vulnerabilities—remains more secure.
It's yet to be seen how many banks will involve themselves in trading cryptocurrencies like bitcoin. According to CNBC, as many as 20 percent of banks, hedge funds, and other financial firms have indicated interest in trading digital currency in recent years.
Since Bitcoin relies on open-source software and peer-to-peer technology, the risk of hacking and cybertheft is high, according to many experts. If banks are going to involve themselves in the cryptocurrency world, it'll be helpful for them to stay up-to-date on any new laws and protocols set by regulators over this "green" currency.
At Integrity Technology Solutions, our eyes and ears are always on the lookout for new innovations in the cybersecurity world. Let us help you explore your options and find the right operational tools to keep your financial firm safer and up-to-date. Email or call our team today at 309.662.7723 to schedule a consultation.