User experience remains the main differentiator for successful financial services organizations and digital transformation provides the only scalable answer. The digitization of products, services, and operations is happening now, and quickly. Organizations are orchestrating applications, networks, and devices to securely provide seamless access to digital services. A financial services organization (FSO) needs to protect its assets, minimize risk, and enable growth to meet today’s security challenges. Cybersecurity solutions must be broad, integrated, and automated across an organization’s entire IT infrastructure.
The Importance of Cybersecurity in Financial Services
In addition to managing their customers’ money, financial institutions also retain customers’ personally identifiable information (PII), which makes financial institutions an attractive target to cybercriminals. As the amount of data available increases, regulatory bodies continue to churn out new laws to protect consumer data Financial institutions face increasing legislative pressure to protect their customers’ data, and failure to comply with regulations could result in severe government penalties. Additionally, failing to maintain security standards can result in an organization losing the ability to process credit card payments altogether if it violates the Payment Card Industry Data Security Standard (PCI DSS).
As financial organizations increase their digital initiatives, the potential attack surface expands as well. Each work-from-anywhere (WFA) login, mobile app, or service integration represents a potential vulnerability. For example, in the United States, multiple banks were hit with a $1.8 billion fine last year because employees were using personal messaging apps for company business. To adapt to the current landscape, financial institutions need advanced threat protection from the data center to the endpoint to the edge with comprehensive cybersecurity solutions that include secure networking for branch locations, WFA capabilities, and next-generation firewalls (NGFWs).
The Cybersecurity Impact of Digital Transformation on Financial Services
As financial service organizations (FSOs) move forward on their digital transformation journey, they need to address cybersecurity concerns in these four stages:
1. Process Transformation
This stage typically consists of revising software or internal processes to be more efficient, such as removing redundant processes or code. Chief Information Security Officers (CISOs) must be involved in these changes because simplifying processes may inadvertently create security gaps.
2. Domain Transformation
This stage occurs when an organization moves into new areas of business. For example, a credit union might begin offering car loans to their customers for the first time. Although offering the new service can be exciting for the business, it also has the potential to create new infrastructure vulnerabilities. Any new systems that are created should be consistent and integrated with existing cybersecurity measures.
3. Business Model Transformation
An example of business model transformation is offering an existing product digitally, such as providing enhanced mobile banking services and paperless statements. Another example is the shift some FSOs are making from their core banking platform to service domain semantic APIs. As with process transformation, any new system should be viewed as having potential vulnerabilities.
4. Organizational and Cultural Transformation
This final stage represents a shift in day-to-day business operations. Digital transformation of internal processes may improve employee efficiency, but it also can open the door to human error. Any cultural transformation should be matched with cybersecurity resources and training at every level of the organization.
Establishing Cybersecurity in a Changing Financial Services Digital Environment
A core part of a successful digital transformation is ensuring adequate security measures are in place to support the new processes and features. However, the amount of infrastructure needed to create systems and keep them protected can seem overwhelming for the average FSO IT department. Some of the most common challenges include:
Scaling WFA Services
The normalization of WFA policies has led many companies to expand their security architectures in ways they may not be prepared to handle. Not only does an increase in WFA expand the attack surface, but unoptimized solutions that provide secure access to the company’s network often can lead to slowdowns, interruptions, and loss of productivity. Financial services organizations must be careful to select cybersecurity solutions that will enable a seamless WFA experience.
Endpoint security is a top cybersecurity concern for most financial services organizations. In the financial sector, endpoint security and WFA both must be scalable because each point-of-sale transaction or mobile login represents a potential breach. A cybersecurity infrastructure is only as strong as its weakest link. An endpoint detection and response (EDR) solution secures endpoints and reduces the attack surface while monitoring for breaches in real time.
Developing an in-house cybersecurity platform for FSOs is a monumental task for most IT departments. When organizations attempt to build an in-house security solution or use an unmanaged service, it can often lead to misconfigurations due to vendor sprawl and the proliferation of disparate tools that don’t communicate with one another. Misconfigurations are the largest cause of cloud vulnerability, and most financial services companies are “going multi-cloud,” which further complicates things.
Going multi-cloud increases complexity, and the potential for security breaches by expanding your attack surface exponentially. Cloud vendors do offer security solutions, but they only span their own cloud. They also rarely offer state-of-the-art protection. The result may be simple and inexpensive, but the result may also be second-rate. Look for ways to standardize security across on-premises and clouds when possible. With consistent security in place, you can seamlessly overlay your internal security policies across multi-clouds as well as on-premises. This both simplifies and consolidates your cloud network and the cloud security, but will also give you a seamless multi-cloud and on-premises network, with a consistent security posture across your entire attack surface. By having all of your clouds and on-premises managed by a single-pane-of-glass console, you can reduce operational complexity and allow for end-to-end automation.
Financial services organizations face a growing number of regulations related to how they handle and protect their customers’ data. Many financial institutions rely on cybersecurity vendors to help them develop a compliant architecture and implement privacy standards.
Consequences of Inadequate Cybersecurity in Financial Services
In extreme cases, a cyberattack may cause irreparable damage or even cause the FSO to lose its ability to process transactions. Some specific consequences of inadequate cybersecurity measures include:
When an attack occurs, security teams often need to isolate the source of the attack and evaluate the amount of damage. In other cases, such as a distributed denial-of-service (DDoS) attack, the goal is to disrupt operations. In either case, the business is interrupted and experiences a loss in productivity both internally and externally. Employees can’t work and customers can’t access their money.
Loss of Critical and Protected Data
Perhaps the biggest security concern when it comes to FSOs is when cybercriminals gain access to proprietary information (such as investment portfolios) or the customer’s PII (such as Social Security numbers, emails, home addresses, and passwords).
An FSO security breach can be catastrophic for the organization’s reputation. Once an FSO has demonstrated that it cannot protect its customers’ PII, it is extremely difficult to recover. The Equifax breach, for example, is still a talking point years after the initial incident.
There are cases where a company can be fined by multiple regulators for a single incident, and we have seen this in the past with companies receiving fines from both the Securities and Exchange Commission and NY State Department of Financial Services, for things like deficient disclosure controls and procedures related to cybersecurity.
There is also a risk that one of your business lines, or potentially the entire firm being shut down for non-compliance if the penalty includes revoking any licenses or charters that the company needs to operate.
Top Challenges When Implementing a Financial Services Cybersecurity Program
Although the consequences of an inadequate cybersecurity program can be far-reaching, integrating a new system comes with challenges. Financial institutions need a trusted partner who can help them navigate and sidestep some of the more common pitfalls of implementing a new cybersecurity program. Some of the potential difficulties include:
Misconfiguration can affect operational efficiency. If new features are not properly integrated into the overall security architecture, security workflows for those products must be managed manually, which reduces efficiency and increases the risk of error.
Even though new technologies and platforms such as a mobile app or smartwatch integration can be convenient for customers, each new technology and platform increases the attack surface. It also increases cybersecurity complexity and makes it more challenging to identify and respond to security threats. Consider the challenges presented by securing multiple environments such as cloud, on-premises, and Software-as-a-Service (SaaS) applications.
As FSOs continue to embrace a hybrid or WFA model, the need for cloud security and endpoint security has also increased. The security architecture needs to be flexible and scalable enough to secure on-site, hybrid, and remote access. Data and applications need to be accessible only to the right users using high-speed, secure connections.
Having security in place is only one part of compliance. The other is reporting and keeping records as required by law and the PCI Security Standards Council. Financial institutions have more regulations to follow than many other industries, so they should have an experienced CISO to manage day-to-day operations and consider partnering with an advanced cybersecurity vendor who can ensure regulatory compliance.
How Financial Institutions Can Overcome Cybersecurity Challenges
A carefully managed solution from a trusted cybersecurity vendor can make all the difference in ensuring proactive cybersecurity and regulatory compliance. Financial institutions should also keep the following in mind when selecting a cybersecurity solution:
Seamless Customer Experience
A cybersecurity solution should be seamless so that the customer doesn’t realize the system is working in the background. The solution should integrate with the existing architecture without overburdening the network. Seconds matter; if a customer can’t connect instantly, they may take their business somewhere else.
Adopt New Business Models
Cybersecurity should be included at every stage of digital transformation efforts. As businesses shift their focus and move into cross-industry disciplines, they need flexible cybersecurity solutions. When the fundamentals of the business change or the network grow in unexpected ways, financial organizations need dependable cybersecurity providers.
Improve Agility and Efficiency
New cybersecurity threats emerge every day. Although many cybersecurity providers use point solutions to fix vulnerabilities as they’re identified, the future lies in artificial intelligence (AI) and machine learning (ML). In this rapidly evolving environment, it is crucial to choose cybersecurity solutions that include automation features that improve accuracy and reduce human error. Automation makes it possible to handle a larger volume of tasks as the organization grows and drives consistency through the use of the same security policies.
Embrace the Cloud
Many financial services organizations have multi-cloud and hybrid cloud networks, so they need to work with cybersecurity vendors that offer solutions that operate natively in all public and private cloud environments. The solutions should also interoperate seamlessly between clouds and on-premises networks to ensure consistent policy enforcement. Financial service organizations should select a cybersecurity vendor that has a proven track record of innovation with security solutions that are scalable, available, and secure.
How Fortinet Can Help
As more businesses shift into the digital landscape and cybercriminals become more sophisticated and hone their attack strategies, financial services organizations need to stay ahead of the curve. The Fortinet Security Fabric offers an integrated security architecture that covers four critical requirements for FSOs to fortify their defenses and ensure their investments are protected: sophisticated threat protection, visibility across their estate, artificial intelligence (AI)-driven threat intelligence, and optimized network and security operations to simplify compliance processes. Fortinet helps protect financial services organizations and customers from cyberattacks and their brand reputation as well.
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